Analysis of Macroeconomic Factors Influencing the Development of the Stock Market in Fragıle Five Countries

The main aim of this study is to analyze the macroeconomic determinants of stock market development. For this purpose, the period of 2000-2014 was considered and panel data method were used. In the study, firstly, the stationarity of the variables was researched. Then the cointegration relation between the variables was analyzed by the Pedroni Cointegration Test. It is seen that there was a positive relationship between the per capita income, capital formation, money supply and development of the stock market in Panel FMOLS result. On the other hand, there is a positive but statistically insignificant relationship between the loans extended by the private sector to the banks and development of the stock market. Finally, there is an inverse relationship between the inflation rate and the development of stock market. In Panel Causality Analysis, it seen that there was a one-way causality relation per capita income to development of stock market in the short term. In the long term, it is seen that there was causality relation per capita income, capital formation and money supply to development of stock market.