| Summary: | Stock markets have experienced significant improvements
especially during the past 30 years, fostered economic growth and
become one of the important leading indicators for the economies.
Economic growth, saving rate, banking sector development, trade
openness, foreign direct investments, institutional quality and stock
market liquidity are found to be major determinants behind stock
market development in the literature. This study investigates major
macroeconomic determinants of stock market development in Turkey
during the period 2005:Q1-2015:Q3 using ARDL cointegration, Toda
and Yamamoto (1995) causality test and regression analysis. We
also found that both economic growth and stock market liquidity had
positive impact on stock market development in the long run, while
inflation had negative impact on stock market development in the long
run.
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