Academic journal article Cross - Cultural Communication

Causal Relationship among the National Wealth, the Consumption and Shanghai Composite Index1/LIENS DE CAUSALITÉ ENTRE LA RICHESSE NATIONALE, LA CONSOMMATION ET L'INDICE COMPOSITE DE SHANGHAI

Academic journal article Cross - Cultural Communication

Causal Relationship among the National Wealth, the Consumption and Shanghai Composite Index1/LIENS DE CAUSALITÉ ENTRE LA RICHESSE NATIONALE, LA CONSOMMATION ET L'INDICE COMPOSITE DE SHANGHAI

Article excerpt

Abstract:

Based on data between the December 1990 to July 2009 of the industrial added value, retail sales and the Shanghai composite index, Cointegration and Granger Causality test have been done and found that: a) An stable cointegration relationship exists among the industrial added value, retail sales and Shanghai composite index, and they are positively correlated. b) The total industrial added value and retail sales Granger cause the Shanghai composite index, but the reverse affect did not observed, which explain China's stock market is not yet a mature market. c) Compared to the total retail sales, the impact of industrial added value on the Shanghai composite index delayed a little longer.

Keywords: cointegration test; Granger causality test; industrial added value; total retail sales; the Shanghai Composite Index

Resumé: Sur la base de données de décembre 1990 à juillet 2009 de la valeur ajoutée industrielle, des ventes au détail et de l'indice composite de Shanghai, le test de la cointégration et le test de la causalité de Granger ont été réalisés et ont constaté que: (1) une relation de cointégration stable existe entre la valeur ajoutée industrielle, les ventes au détail et l'indice composite de Shanghai, et ils sont córreles positivement. (2) La valeur totale ajoutée industrielle et les ventes au détail ont une influence sur G indice composite de Shanghai, mais l'effet inverse n'a pas été observé, ce qui explique que le marché boursier de la Chine n'est pas encore un marché mature. (3)Par rapport au total des ventes au détail, l'impact de la valeur ajoutée industrielle sur l'indice composite de Shanghai est un peu retardé.

Mots-clés: test de cointégration; test de causalité de Granger ; valeur ajoutée industrielle; ventes au détail totales ; l'indice composite de Shanghai

1. INTRODUCTION

The core in the development of financial theory is the mutual promotion of financial development and economic growth, financial markets were established when the real economy developed into a certain stage, and its formation and development was designed to promote macroeconomic development. As an important part of the financial markets, the initial purpose of the stock market is to finance for enterprises so that enterprises has adequate fund to promote a better development. Since December 19, 1990 when the Shanghai Stock Exchange was established, China stock market has achieved rapid development. Until December 25, 2009, the A shares in Shanghai and Shenzhen stock markets has accounts for a total of 1,375,881 thousand, B shares accounts are 2460.3 thousand and the effective accounts are 12,013.86 million. The entire market from scratch, from small to large, developed rapidly, and its market institutions, transaction mechanisms, and supervision and management perfected gradually. The Chinese stock market's boom owes much to China's economic prosperities, moreover, the stock market development and growth has also enhanced the capital markets, which will also react to the real economy to some degree. Macroeconomic variables, is an important factor making stock price fluctuate, especially since 2007, the global financial crisis induced by the U.S. sub-prime crisis , first of all have had a tremendous impact around the world, including China's stock markets , and now has been seriously affected most countries' real economy. So the macroeconomic variables are affected, and the macroeconomic variables also affect the stock market, which produced the cyclical effects. The macro-economic controlling measurements on the economy taken by the government, is also based on this mechanism to adjust the capital markets and the real economy.

In short, because of the stock market's "wealth effect", investors take some stock proceeds for consumption, and the increasing consumption promotes the growth of the real economy, which in return support the stock market's rising. However, as for the stock prices, consumption and economic growth in China, the question of whether there is mutually promotion is worth studying. …

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