Nexus of KSE-30 Index

Abstract

The Financial development in Pakistan is mostly represented by Karachi stock exchange 100-Index with ignorance of Karachi stock exchange 30-Index which was established to represent financial development Indicator and economic growth indicator as well in Pakistan. So, this study will be investigate the relationship of financial development and economic growth in Pakistan by taking KSE-30 Index, KSE-All Share Index and KSE-100 Index for financial development in Pakistan. In this study time series data varying from 1992 to 2013 is investigated by different econometric tools i.e. Augmented Dickey Fuller (ADF) unit root test, Johansen Cointegration method and Granger causality test. The results of these tools showed that a positive relationship exists between financial development and Economic growth of Pakistan both in long run and short run perspectives. The result also derived that there is bidirectional causality relationship between financial development and economic growth in Pakistan

Keywords: Financial Development, Economic Growth, KSE 30-Index