The effects of institutional quality on the Dhaka Stock Exchange

Mamta Chowdhury, Mohammad Toammel Hossain

Research output: Chapter in Book / Conference PaperConference Paperpeer-review

Abstract

![CDATA[Dhaka Stock Exchange (DSE) plays a key role in channelling a large volume of funds from the investors to the entrepreneurs in Bangladesh. In 2013, 256 companies were listed and total market capitalisation of DSE was US$25,351.66 million with a 15.82% growth in stock return. DSE significantly contributes to the output, employment and overall income of the country when the pulled capital returns to the economy as ultimate investments. Since the institutional factors as well as the socio-economic are fundamental to the growth and savings of an economy and encourages investment, this paper examines the magnitude of the influence of a selective set of institutional quality of the country along with macroeconomic factors on stock market in Bangladesh using cointegration and error correction model employing monthly time series data from July 2007- June 2015. Results of the study suggest that the increased industrial production and workers’ remittances have long run positive relationship with stock returns of DSE. Inflation and money supply found to have negative long run relationship with stock returns; however, market capitalization and consumer confidence indicate a positive relationship with stock returns of DSE. Nonetheless, the results indicate increased corruption and composite risk are having negative impact on the stock returns of DSE. Thus, the policy prescriptions recommend controlling inflation rates and money supply growth and implementing various policies to correct the administrative irregularities and corruption and lowering composite risk would assist to channel the funds in the productive investment via DSE and enhance the economic growth of the country.]]
Original languageEnglish
Title of host publicationProceedings of the 1st International Conference on Business Research and Ethics (iCBRE), 20-22 November, 2017, Sydney, Australia
PublisherScience, Technology and Manaement Crest
Pages69-75
Number of pages7
ISBN (Print)9780648014782
Publication statusPublished - 2017
EventInternational Conference on Business Research and Ethics -
Duration: 20 Nov 2017 → …

Conference

ConferenceInternational Conference on Business Research and Ethics
Period20/11/17 → …

Keywords

  • stock exchanges
  • Dhaka Stock Exchange
  • emigrant remittances

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