Economic Development and the Development of the Securities Market: A Study of China's CSI 300 Index

Aiping Luo; Shuoyan Lin; Beibei Hong

doi:10.54097/mmdvjr12

Authors

Aiping Luo
Shuoyan Lin
Beibei Hong

DOI:

https://doi.org/10.54097/mmdvjr12

Keywords:

Securities market, Broad money supply, VAR model

Abstract

The Chinese securities market has experienced over two decades of development and has emerged as a significant global investment market. However, compared to other developed securities markets, it still faces issues such as an inadequate institutional framework, irrational investor behavior, and imperfect mechanisms. To explore the relationship between China's economic development and its securities market, this paper employs Eviews time series analysis and VAR modeling for empirical research, aiming to uncover the relationship and operational mechanisms between the two. The findings indicate a certain correlation between economic development and securities market development in China. The variance decomposition reveals that the contribution of economic development to the securities market is relatively low, highlighting a major issue within the Chinese securities market. Consequently, this paper proposes reform suggestions from various perspectives, including institutional, investor, and listed company aspects, to guide the healthy growth of the Chinese securities market and create a favorable environment for economic development.

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