Abstract
We aimed to find the effect of economic freedom on equity market liquidity and
performance. Data is collected for variables for the period 2000-2017. To identify the
relationship between variables, we utilize the cointegration approach. The cause and
effect relationship is identified with the Granger Causality approach. We have found a
direct significant impact of economic freedom and KSE-100 Index return, market
capitalization, and trading volume. We observe no causality between economic freedom
and return from the stock market. Furthermore, we find long-term effects of economic
freedom on stock market performance and its liquidity. Additionally, we find that GDP
growth, interest rate, and inflation have a causality with market capitalization, stock
market index, and trading volume. The study suggests a cross-sectional analysis using
multiple countries' data with a large sample set.
Hamid Ullah, Shahid Jan. (2020) Economic Freedom on Stock Market Performance and Liquidity: Evidence from KSE-100 Index Pakistan, NUML International Journal of Business & Management, Volume 15, Issue 1.
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