Feedback of macroeconomic indicators to shocks in second-tier stock market development and innovation within Kaleckian framework: Hong Kong case study

Nguyen, Trang, Chaiechi, Taha, Eagle, Lynne, and Low, David (2019) Feedback of macroeconomic indicators to shocks in second-tier stock market development and innovation within Kaleckian framework: Hong Kong case study. In: Springer Proceedings in Business and Economics: selected papers from International Conference on Applied Economics. From: ICOAE 2019: International Conference on Applied Economics, 4-6 July 2019, Milan, Italy. (In Press)

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Abstract

Despite the importance of second-tier stock markets in supporting SMEs (Small and Medium Enterprise) development and innovation, the dynamic impacts of second-tier stock markets development and innovation on macroeconomic indicators remain underexplored. This study aims to bridge the gap both theoretically and empirically. Accordingly, the theoretical model of Kaleckian-Post-Keynesian macroeconomics is extended and an empirical model is specified and estimated for the case of Hong Kong. A Structural Vector Error Correction (SVEC) estimation technique and impulse response function are adopted for empirical analysis. The results determine that Hong Kong’s macroeconomic indicators exhibit small but positive feedback to shocks in the second-tier market development and innovation in the short run. Specifically, various channels of growth including private investment, domestic savings, and productivity growth are found to be responsive to shocks in the second-tier market development indicators. Meanwhile, shocks to innovation indicators effectively induce responses of the following growth channels: private investment, domestic savings, productivity growth, and employment.

Item ID: 60504
Item Type: Conference Item (Research - E1)
ISSN: 2198-7246
Keywords: Second-tier stock market; Innovation; Kaleckian-Post-Keynesian economics; Structural VEC (SVEC) model; Impulse response function
Date Deposited: 09 Oct 2019 00:41
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140207 Financial Economics @ 50%
14 ECONOMICS > 1403 Econometrics > 140305 Time-Series Analysis @ 50%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910103 Economic Growth @ 40%
91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910109 Savings and Investments @ 60%
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