Stock Market Liquidity and Economic Growth: a Critical Appraisal of the Levine/Zervos Model

Stock Market Liquidity and Economic Growth: a Critical Appraisal of the Levine/Zervos Model

Levine & Zervos ( 1998 ) presented cross-country econometric evidence showing that, in a sample of 47 countries, stock market liquidity contributed a significant positive influence on GDP growth between 1976-93. We show that the Levine-Zervos results are not robust to alternative specifications...

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Veröffentlicht in:International review of applied economics 2004-01, Vol.18 (1), p.63-71
Hauptverfasser: Zhu, Andong, Ash, Michael, Pollin, Robert
Format: Artikel
Sprache:eng
Schlagworte:
Data analysis
Developing countries
Econometrics
Economic growth
Economic models
Economics
GDP
Gross Domestic Product
LDCs
Liquidity
Manycountries
Securities markets
Stock exchange
Stock market
Studies
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Zusammenfassung:Levine & Zervos ( 1998 ) presented cross-country econometric evidence showing that, in a sample of 47 countries, stock market liquidity contributed a significant positive influence on GDP growth between 1976-93. We show that the Levine-Zervos results are not robust to alternative specifications because of the incomplete manner in which they control for outliers in their data. We show that when one properly controls for outliers, stock market liquidity no longer exerts any statistically observable influence on GDP growth.
ISSN:0269-2171
1465-3486
DOI:10.1080/0269217032000148645