finacial_devt_stock_mkt_dat_SA.zip

<i>Financial systems and institutions play important roles in economic growth and continue to dominate discussions, especially in developing economies. However, their impacts on stock market performance remain unclear. This study examines the impact of financial development on stock market performance in South Africa from 1980 - 2019. </i><i>The results are robust to the inclusion of institutional variables</i><i>. The Fully Modified Ordinary Least Squares (FMOLS) and the error correction models were employed as estimation strategies for the long run and short-run impacts, respectively. The study found that financial development has a positive and significant impact on stock market performance in the long-run and short-run. The impact is stronger with better institutional quality. </i><i>The study recommends the strengthening of the financial infrastructure and legal frameworks to improve financial participation and transparency. This would increase access to capital and boost investor confidence to enhance stock market performance.</i>