Özet:

There is a fairly broad literature that explores the relationship between financial development and economic growth. The studies are often focused on the impact of developments in the widely known money and credit-related sizes on economic growth. However, the institutions operating in the financial markets and the instruments that are traded are quite diverse. In particular, the stock exchanges are an important footprint of the financial markets. Efficient operating exchanges serve the spread of capital to the base, and at the same time allow savings holders to diversify risks. In addition, the exchanges provide low-cost solutions to the financial problems that companies face in the way of new investment or expansion. In the measurement of the effectiveness of the exchange, the market size and market capitalization variables are often used. However, in recent years, market liquidity has also been considered one of the best measurement tools. This study examined whether there is a causal relationship between the liquidity of the stock exchange and economic growth, an indicator of financial development. For this purpose in the study for Turkey 1995:Q1 - 2018:Q1 period, the liquidity and growth rate variables of the BIST-100 index were applied to the Granger causality test. Tests have found that the increase in stock exchange liquidity has a positive impact on economic growth, but that economic growth has no significant impact on stock exchange liquidity.

Özet:

There is a vast literature on the link between financial development and economic growth. Studies are generally focused on the effect of the developments in money and credit on economic growth. However, the financial institutions and the instruments operating in the financial markets are quite diverse. Especially, the stock markets are an essential pillar of the financial markets. The efficient stock markets help to spread the capital to the base as well as allow the investor to diversify the risk. Moreover, the stock markets provide solutions to the financial problems faced by firms in new investment or expansion at low cost. Market size and market capitalization variables are generally used in the measurement of the stock market efficiency. However, in recent years, market liquidity is considered as one of the best proxies of the efficiency of the stock market. In this study, it was investigated whether there is a relationship between stock market liquidity as an indicator of financial development and economic growth. For this purpose, we implement the Granger causality test to the period between 1995: Q1 – 2018: Q1 using BIST-100 index liquidity and growth rate for Turkey. As a result, it was shown that the increase in stock liquidity had a positive impact on economic growth, but economic growth had no significant effect on the liquidity of the stock market.

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