The Macrotheme Review

MC Stock Market Capitalization over GDP as a measure of the equity market size. 

 

 

TR Capital Market Turnover ratio

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 indicates how developed the capital market is. Higher 

turnover would signal more activity, implying more confidence and efficiency in the market 

and the integral role it plays in support of financial development and economic activity. 

 

 

Among the explanatory variables the following variables are used:

 

 

XM is total of Export and Import divided by the GDP of the country as a measure of trade 

openness. With the introduction of globalization more countries are increasingly 

implementing trade liberalization that has been demonstrated to have positive impact on 

financial development.