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Determinants of Stock Market Development in Emerging Economies: Is Thailand Different?

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Determinants of Stock Market Development in Emerging Economies: Is Thailand Different?
The Institute of International Studies - Ramkhamhaeng University

BM 622 Investment Management

Professor Dr. Felix Ayadi

Determinants of Stock Market Development in
Emerging Economies: Is Thailand Different?

Presented by
Anusara Inpansuan
Chiranan Thongbainoy
Nonglak Nusanram
Yossawat Lerdthannavaranont
Master of Business Administration

Abstract
This paper is an adaptation from a study conducted by Charles Amo Yartey from the International Monetary Fund. The paper examines the macroeconomics and institutional determinants of stock market development using data from 42 countries during the period 1990 to 2004. The paper finds that macroeconomic factors such as income level, gross domestic development, banking sector development, private capital flows, and stock market liquidity are important determinants of stock market development. Additionally, it analyzes institutional factors such as political risk and stability and law and order are also important determinants of stock market development because they enhance the investors trust in the stability of the market. Analysis in this paper will also present that factor for the development of stock market in other countries can also explain the development of Stock market in Thailand.

Contents
I. Introduction 3
II. Stock Markets and Economic Growth: Theoretical and Analytical Issues 4
III. Stock Market Development in Emerging Markets 6
IV. The Stock Exchange of Thailand 8 A. Market Development 8
B. Structure, Operations, and Regulations 9
C. Main Characteristics 10 Market Size Market Depth 11 V. Methodology and Data 11
A. The Calderon-Rossell Model 11
B. The Modified Calderon-Rossell Model 13
C. The Data 14 Dependent Variable: Stock Market Development 15 Income Level 15 Banking Sector Development 15 Savings and Investment 16 Stock Market
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