Integration Between Stock Market Development and Economic Growth

Over the years, the Indian capital market system has undergone major fundamental institutional changes which resulted in reduction in transaction costs, significant improvements in efficiency, transparency and safety. All these changes have brought about the economic development of the economy through stock markets. In the same way, economic expansion fuelled by technological changes, products and services innovation is expected to create a high demand for stock market development. In this context, the main focus of the present study is to estimate integration between stock market development and economic growth while controlling for the effects of other growth determinants like FII and exchange rate.