Stock Market Activities and Industrial Production Growth: Evidence from 20 International Markets

Abstract

This study presents evidence on the relations of stock market performance and industrial production growth for a group of 20 industrial markets. Evidence supports the notion that an increase in stock returns or a rise in the market value of stocks contributes positively to industrial production growth. Evidence suggests that stock market risk has a significantly negative effect on production growth for advanced markets. The Granger test finds a unidirectional causality running from stock returns or stock volatility to industrial growth. However, the United States shows a bilateral causality between stock volatility and industrial production growth.

Citation

Chiang, T.C. and Chen, X. (2017), "Stock Market Activities and Industrial Production Growth: Evidence from 20 International Markets", Advances in Pacific Basin Business Economics and Finance (Advances in Pacific Basin Business, Economics and Finance, Vol. 5), Emerald Publishing Limited, Leeds, pp. 39-75. https://doi.org/10.1108/S2514-465020170000001003