Socioeconomic factors of stock market development: role of tertiary education

Abstract

Considering economic growth and banking sector development as economic factors and tertiary level of education as a social factor, this paper explores their effect on stock market development in Bangladesh during the period 1976 to 2015. This paper reveals a significant positive impact of banking sector development and economic growth and an insignificant positive impact of tertiary level of education on stock market development both in the short-run and in the long-run. The positive long-run effect of socioeconomic factors on stock market development suggests that over time the rise in tertiary education, economic growth, and banking sector development contributes into the stock market development. Hence, government should give special attention into the development of tertiary education in addition to accelerating economic growth and banking sector development to ensure broad base stock market.