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Issues in Business Management and Economics
Vol.2 (3), pp. 046-053, March 2014
ISSN 2350-157X
Article ID BM/014/011. 08 pages
Copyright © 2014 Author(s) retain the copyright of this article. Author(s) agree that this article remain permanently open access
under the terms of the Creative Commons Attribution License 3.0 International License

Original Research Article

Relationship between stock market performance and macroeconomic variables in Ghana

Accepted 26 February, 2014

Addy Frank Kpanie1, Sampson Vivian Esumanba2 and Yakubu Awudu Sare3

1Tactical Business Initiative Consultancy Ltd, BAE 2/21 Mantse Afotey Adzin Rd Baatsona. Community 18 Tema. Ghana
2Vivian and Associate Consultancy Ltd, P. O. Box KJ 538, Kumasi,Ghana.
3Department of Banking and Finance, School of Business and Law, University for Development Studies, Wa-Ghana.

*Corresponding Author’s Email:
Tel.:+233 (0) 246851603


Employing the Error Correction Model and the Augmented Dickey-Fuller Co-integration analysis on quarterly time series data, the study examined the dynamic connection between macroeconomic variables such as money supply, Treasury bill (proxy for interest rate), inflation rate, exchange rate and oil prices and the Ghana stock market. The main findings of the study revealed that oil prices and money supply are statistically significant at 1% level in explaining the influence of those macroeconomic variables on the Ghana Stock Exchange. The finding of the work establishes that there is a long run relationship between some of the macroeconomic variables and the stock market as well. With these results it is important to highlight that there is the need to implement prudent macroeconomic policies in order for the country to derive maximum benefits from the stock markets. This must be done in relation to appropriate monetary policies to ensure macroeconomic stability.

Key words: relationship, stock market, performance, macroeconomic variables.

Key words:

Sare et-al