Macroeconomic Determinants of Stock Market Development: Evidence from Panel Data Analysis

Arab stock exchanges have experienced tremendous growth in recent decades, with an increase in the number of listed companies and the size of stock market capitalization. In light of this remarkable growth, the purpose of this research is to determine the most important determinants and economic factors influencing this development from 2006 to 2017. Using panel data models, we discover that trade openness, market liquidity, money supply, and economic growth all have positive effects on stock market development, while the global financial crisis has a negative effect. Based on these findings, steps should be taken to improve market liquidity, maintain a balanced economic growth rate, and promote the development of Arab stock exchanges. Based on these findings, policy recommendations are made.