Stock Market and Shareholder Protection: Are They Important for Economic Growth? (original) (raw)

This paper investigates the relationship between stock market development, shareholder protection, and economic growth, with a focus on India. It emphasizes that while stock market liquidity facilitates economic growth, the impact of stock market development is influenced by the country's legal and regulatory environment. A comprehensive index measuring legal development in India is constructed and compared to existing investor protection indices. The analysis presents empirical evidence supporting the idea that stronger legal frameworks enhance investor confidence and thereby contribute to economic growth.