Stock market, real estate market, and economic growth: an ARDL approach

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The paper investigates the correlation between stock market, real estate market, and economic growth in Vietnam, which is an emerging country. Quarterly data in Vietnam from the third quarter of 2004 to the third quarter of 2018 were utilized. By using the Autoregressive Distributed Lag (ARDL) approach, the results reveal that economic growth is positively associated with stock market and real estate market. An unprecedented finding of this study is that economic growth (GDP) is more correlated to stock market efficiency (SME) than net trading value by foreign investors (FI). Moreover, global financial crisis (GFC) exerts a negative impact on economic growth and real estate market in Vietnam. Further, net trading value by foreign investors (FI) also negatively influences real estate market (REM) in the short term. The study has greatly succeeded in giving first empirical evidence on the relationship between stock market, real estate market, and economic growth in Vietnam. More than that, the results show the key role of global financial crisis in this correlation. The findings are valuable to economies around the world, especially bringing a practical and meaningful value to developing countries like Vietnam.

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    • Figure 1. The correlation between stock market, real estate market, and economic growth
    • Figure 2. Stability tests
    • Figure 3. Stock market (SME, FI) and economic growth (GDP)
    • Figure 4. Real estate market (REM) and economic growth (GDP)
    • Figure 5. Real estate market (REM) and net trading value by foreign investors (FI)
    • Figure 6. Real estate market (REM), economic growth (GDP), and global financial crisis (GFC)
    • Table 1. Descriptive statistics of all variables
    • Table 2. Correlation matrix
    • Table 3. Unit root test (Dickey-Fuller test)
    • Table 4. ARDL bound testing cointegration
    • Table 5. Coefficient estimation results