THE LONG TERM IMPACT OF DEPOSIT DOLLARIZATION ON STOCK MARKETS IN MIST ECONOMIES
THE LONG TERM IMPACT OF DEPOSIT DOLLARIZATION ON STOCK MARKETS IN MIST ECONOMIES
Author(s): Ahmet Melik Sahabi, Sacit Sari, Mesut AslanSubject(s): Supranational / Global Economy, Financial Markets, Globalization
Published by: Kafkas Üniversitesi Sağlık, Kültür ve Spor Daire Başkanlığı Dijital Baskı Merkezi
Keywords: Deposit dollarization; stock market; panel cointegration;
Summary/Abstract: With the globalization and financial liberalization, deposit dollarization and increasing use of foreign currency deposits by households and firms have garnered significant attention and become an important subject in recent years. In this study, we tried to uncover the relationship between deposit dollarization, which is a form of financial dollarization, and stock market in MIST economies for the period between 2003Q1 and 2022Q2. With the help of second-generation methods of panel econometrics, we have identified a significant, adverse long-term influence of deposit dollarization on stock markets. This outcome has been substantiated through the utilization of three distinct estimation methodologies. Moreover, our Granger non-causality test demonstrates the presence of a causal relationship emanating from deposit dollarization to the stock market.
Journal: Kafkas Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi
- Issue Year: 14/2023
- Issue No: 28
- Page Range: 662-685
- Page Count: 24
- Language: English
