Examination Relationship between Stock Market and Economic Growth in terms of Sectorial Perspective in Turkey

Despite the fact that the relationship between stock markets and growth has been researched many times in the literature, there are few studies that examined the relationship in terms of the sectors. In this study, relationship between stock market and economic growth, are examined from a sectorial perspective (industry and services) cover the period 2000:Q1 to 2017:Q4 in Turkey. Bound Test results revealed the existence of cointegration relationship between the sectorial gross domestic product and sectorial stock indices. In addition, results indicated that an increase in sectorial stock market indices affects the sectorial GDPs positively in the long term. In the short term, it is determined that there is a relationship between the series. The results of the Toda-Yamamoto Causality test revealed that there is a one-way causality running from sector-specific stocks to relevant sector-specific GDP. The findings showed that economic growth is sensitive to sub-sector stock market investments in Turkey