Stock market development and economic growth in West African Economic and Monetary Union

This paper investigates the relationship between the development of the West African Economic and Monetary Union (WAEMU) stock market and economic performance. Stock market development indicators were identified and used to calculate the WAEMU stock market development index. The only companies quoted in Abidjan regional stock market were used to determine gross domestic product (GDP) which is the index of Burkinabe and Ivorian economies performance. A set of control variables were also identified. Empirical results suggest that the gross domestic product and stock market development are co–integrated when the control variables are included in the analysis; that is, there is a long–term relationship between these variables taken together. In addition, there is a unidirectional causality between stock market development and economic growth.