Impact of Stock Market, Trade and Bank on Economic Growth for Latin American Countries: An Econometrics Approach

Abstract

In this study, the impact of stock market, trade and credit by bank on economic growth for nine Latin American countries are examined. Fixed effect panel model with dummy variable approach is used in this research work. Significant Hausman test statistic conferred for fixed effect panel model to analyze this dataset. The inflation rate, import and credit by banking sector have negative impact on GDP growth whereas the rest of the variables, exports, stock market, board money, credit by private sector and interest rate have positive contribution to the GDP growth. Only interest and credit by banking sector are significant. The GDP for Chile is significantly but GDP for all other countries are not significantly different from that of Argentina. In this panel data analysis, 25% variation of GDP can be explained by the independent variables considered in the model.