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Role Of Stock Market In Economic Development

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ROLE OF STOCK MARKET IN ECONOMY DEVELOPMENT

ABSTRACT
Stock Market is one of the most vigorous sector which plays an important role in contributing to the wealth of an economy. Growth rate of stock market signify growth percentage rise in economy. There is a strong positive relationship between stock market development and economic growth & help to efficiently direct the flow of savings and investment in the economy in ways that make possible the stockpiling of capital. It fulfills a central function in the economy which bring together savers and investors (providers of capital) & with companies and the state (borrowers) on the other. The main objective is to analyze the link between stock market performance & economic development. …show more content…

In other words: A stock exchange is an entity that provides "trading" facilities for stock brokers and traders to trade stocks , bonds , and other securities . Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends . Securities traded on a stock exchange include shares issued by companies, unit trusts , derivatives , pooled investment products and bonds .
HISTORICAL EVOLUTION OF INDIAN STOCK MARKET
As already stated, the Indian Stock markets have played a significant role in the early attempts at industrialization in India in the late nineteenth and early twentieth centuries. The early textile mills and the first steel plants were funded in the stock market. Some of these capital raising exercises were …show more content…

Without a stock exchange, savings & economic progress and productive efficiency- would remain underutilized. In the old days, the task of mobilization and allocation of savings could be attempted by a much less specialized institution than the stock exchanges. But as business and industry expanded and the economy assumed more complex nature, the need for 'permanent finance ' arose. Entrepreneurs needed money for long term whereas investors demanded liquidity – the facility to convert their investment into cash at any given time. The stock market provides listed companies with a platform to raise

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