Stock market development and economic growth in Nepal: Evidence from ARDL cointegration and granger causality analysis

Stock market development and economic growth in Nepal: Evidence from ARDL cointegration and granger causality analysis | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Stock market development and economic growth in Nepal: Evidence from ARDL cointegration and granger causality analysis Dipak Singh Rawat This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8937119/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This study examines the relationship between stock market development and economic growth in Nepal using ARDL cointegration and Granger causality analysis. The ARDL bounds test reveals a long-run cointegration relationship between stock market development and economic growth, with the F-statistic exceeding the upper bound critical values at all significance levels. The long-run analysis shows that stock market index negatively affects economic growth, while market capitalization and money supply positively influence growth. The exchange rate demonstrates a significant negative effect on growth, indicating that currency depreciation hampers the macro economy. Granger causality tests further suggest unidirectional causality between stock market development and economic growth. The error correction model (ECM) reveals a rapid adjustment process, with 52.31% of disequilibrium corrected each period. These findings provide empirical insights into the relationship between stock market development and economic growth in Nepal, offering valuable implications for policymakers and investors. stock market development economic growth ARDL cointegration granger causality Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8937119","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":598986688,"identity":"d53eeb1e-7e1d-463a-8a92-186bf67398d8","order_by":0,"name":"Dipak Singh Rawat","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA6UlEQVRIiWNgGAWjYDCCwwwMjA0QJuMDMHWAeC3MzAbEaTmA0MImQZQWvuO8Bz/OYLgnb3D8/LGqm20Mcnw3EtgeF+DRInmYL1lyA0Ox4YYzyWy3c9sYjCVvJLAbz8CjxeAwj4HkA4YExm0HIFoSNwBtkebBr8X4J1CL/bbzj9mKgVrqidFiBnRYQuK2G8lszEAtCQaEtAD9kmY5wyAhef+Nx8bSOeckDGeeedgmjc8vfOfPHr7ZU5FgO7M/8eHnnDIbeb7jycek8YUYAwPIDQZwHihqGBuY8epgwOZsAlpGwSgYBaNghAEATv5NfsC4eNkAAAAASUVORK5CYII=","orcid":"","institution":"Mid Western University","correspondingAuthor":true,"prefix":"","firstName":"Dipak","middleName":"Singh","lastName":"Rawat","suffix":""}],"badges":[],"createdAt":"2026-02-22 05:53:14","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8937119/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8937119/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":104400925,"identity":"d34e7d3d-a795-41c2-927a-112fa8bbfa11","added_by":"auto","created_at":"2026-03-11 12:11:26","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":793187,"visible":true,"origin":"","legend":"","description":"","filename":"StockMarketDevelopment.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8937119/v1_covered_92b90b0c-1b56-4d28-9b55-d605bb042588.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Stock market development and economic growth in Nepal: Evidence from ARDL cointegration and granger causality analysis","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"stock market development, economic growth, ARDL cointegration, granger causality","lastPublishedDoi":"10.21203/rs.3.rs-8937119/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8937119/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis study examines the relationship between stock market development and economic growth in Nepal using ARDL cointegration and Granger causality analysis. 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