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The Impact of Capital Market in Economic Growth of Bangladesh

Tanveer Muhammad Al-Shams, Aysha Ashraf

Abstract


This study examines the compel of the capital market on economic growth of Bangladesh between 2002 and 2012. The Data has been collected from Security Exchange Commission reports, Dhaka Stock Exchange Review Reports, and Central Bank of Bangladesh Statistical Bulletin respectively. From this study, we are able to know the different roles and functions played by the capital market. Moreover, this study showed the trends of some capital market exogenous variables like market capitalization, the all market share index, market value of transaction, number of deal and inflation over the last ten years. Ordinary lease square method of log-linear regression analysis was used to analyze the data. The result shows that the capital market has significantly impacted on the GDP. It is concluded that capital market in Bangladesh has the potential of growth inducing. The study recommends that the government should restore confidence to the market through regulatory authorities by ensuring transparency, fair trading transactions and improve the market capitalization by encouraging more foreign investors to participate in the market and also to increase investment instruments such as derivatives, convertibles, swap and option in the market.

 


Keywords


Capital market, GDP, Shares, Economic Growth, Bangladesh.

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