Why Equity Market Activity Grow More Rapidly in Relationship to Foreign Direct Investment
[1]
Khuram Shafi, School of Management, HuaZhong University of Science and Technology, Wuhan, China.
[2]
Liu Hua, School of Management, HuaZhong University of Science and Technology, Wuhan, China.
[3]
Zahra Idrees, School of Management, HuaZhong University of Science and Technology, Wuhan, China.
[4]
Amna Nazeer, Schools of Statistics and Mathematics, HuaZhong University of Science and Technology, Wuhan, China.
A country is said to be developed only if the economy of that particular country is growing. The development and growth of an economy is beneficial for the country, as it acts as a major indicator for the growth of all the main players of the society that helps in the development of the country. One of the main players that are affected by the economic development includes the equity market, also known as the stock exchange, of the country. This study revealed the relationship between the growth of the equity market activity and the development of the economy. Foreign Direct Investment (FDI) and Gross Domestic Production (GDP) are used for measuring the development of the economy while the market price index is used to measure the growth of the equity market activity. Data for the last 20 years were collected on FDI, GDP and index for the purpose of this study to find the relationship between the development of the economic and the equity market growth. The results showed that there is a highly significant relationship between the equity market activity and the economic development and the growth of the former is totally dependent upon the development of the later.
Finance, Growth, Development, Equity Market, Economy
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