Investment and Returns: Canadian Stock Market

Investment and Returns: Canadian Stock Market

This paper uses cointegration analysis and the VECM to investigate the role of stock markets in determining investment in Canada. The results reveal that the Canadian investment and stock market returns share long run equilibrium relationship. Further, the results suggest that the Canadian investmen...

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Veröffentlicht in:SCMS journal of Indian management 2012-07, Vol.9 (3), p.21
Hauptverfasser: Anoruo, Emmanuel C, Sawhney, Bansi L, DiPietro, William R
Format: Artikel
Sprache:eng
Schlagworte:
Capital formation
Cointegration analysis
Consumption
Dependency theory
Economic growth
Efficient markets
Industrialized nations
Investments
Market shares
Prices
Profits
Securities markets
Stock exchanges
Stock prices
Studies
Time series
US exports
Valuation
Variables
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Zusammenfassung:This paper uses cointegration analysis and the VECM to investigate the role of stock markets in determining investment in Canada. The results reveal that the Canadian investment and stock market returns share long run equilibrium relationship. Further, the results suggest that the Canadian investment and stock market returns reinforce each other in the Granger-sense. In addition, the US stock market (proxied by the S&P 500) is found to play a significant role in determining investment in Canada. From a policy perspective, the Canadian authorities can foster investment by formulating and implementing policies that are conducive to stock markets, as these will in turn spur capital formation in the economy.
ISSN:0973-3167