Evolving Importance of Securities Market to Ensure Economic Growth: Evidence from Armenia


  • Ashot Salnazaryan
  • Haykaz Aramyan




financial market, securities market, economic growth, Armenia, regression analysis


This research aims to reveal the importance of securities market in ensuring economic growth in Armenia. In order to make the research more substantial, we also examined the impact of other financial market segments, such as insurance market and credit market, on the economic growth. To estimate the relationship between financial market segments and economic growth, an empirical research was conducted using correlation and regression techniques. The research reveals that the most significant impact on the economic growth among Armenian financial market segments has the credit market of Armenia. There is no significant relationship between economic growth and insurance, as well as corporate securities market. It is pointed out in the research, that the evolving importance of the role of securities market in the economic growth is not yet demonstrated in Armenia, which, perhaps, results from the absence of interaction between securities market and economy in Armenia.

JEL Codes - G23; O11


Acemoglu, D., and Zilibotti, F., 1997. Was Prometheus unbound by chance? Risk, diversification, and growth. Journal of Political Economy, 105(4), 709-751. doi: http://dx.doi.org/10.1086/262091

Allen, F., and Gale, D., 2000. Financial contagion. Journal of Political Economy, 108(1), 1-33. doi: http://dx.doi.org/10.1086/262109

Arestis, P., Demetriades, P., and Luintel, K., 2001. Financial Development and Economic Growth: The Role of Stock Markets. Journal of Money, Credit and Banking, 33(1), 16-41. doi: http://dx.doi.org/10.2307/2673870

Bagehot, W., 1873. Lombard Street. A Description of the Money Market. (References from the (1962 edition ed.). Homewood, IL: Richard D. Irwin.

Boot, A., and Thakor, A., 1997. Financial System Architecture. Review of Financial Studies, 10(3), 693-733. doi: http://dx.doi.org/10.1093/rfs/10.3.693

Boyd, J., and Smith, B., 1996. The Coevolution of the Real and Financial Sectors in the Growth Process. The World Bank Economic Review, 10(2), 371-396. doi: http://dx.doi.org/10.1093/wber/10.2.371

Demirguc-Kunt, A., Feyen, E., and Levine, R., 2011. The Evolving Importance of Banks and Securities Markets: The World Bank. doi:http://dx.doi.org/10.1596/1813-9450-5805

Demirguc-Kunt, A., and Levine, R., 2001. Financial Structures and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development. Cambridge, MA: MIT Press. doi. doi:http://dx.doi.org/10.1002/ijfe.255

Dewatripont, M., and Maskin, E., 1995. Credit and efficiency in centralized and decentralized economies. The Review of Economic Studies, 62(4), 541-555. doi: http://dx.doi.org/10.2307/2298076

Ergungor, O. E., 2008. Financial system structure and economic growth: Structure matters. International Review of Economics & Finance, 17(2), 292-305. doi: https://doi.org/10.1016/j.iref.2006.09.001

Garretsen, H., Lensink, R., and Sterken, E., 2004. Growth, financial development, societal norms and legal institutions. Journal of International Financial Markets, Institutions and Money, 14(2), 165-183. doi: http://dx.doi.org/10.1016/j.intfin.2003.06.002

Ghysels, E., Idier, J., Manganelli, S., and Vergote, O., 2014. A high frequency assessment of the ECB Securities Markets Programme: European Central Bank. doi:http://dx.doi.org/10.1093/jeea/jvw003

Greenwoods, J., and Smith, B., 1997. Financial markets in development, and the development of financial markets. Journal of Economic Dynamics & Control, 21(1), 145-181. doi: http://dx.doi.org/10.1016/0165-1889(95)00928-0

Holmstrom, B., and Tirole, J., 1993. Market Liquidity and Performance Monitoring. Journal of Political Economy, 101(4), 678-709. doi: http://dx.doi.org/10.1086/261893

Levine, R., and Zervos, S., 1998. Stock Markets, Banks, and Economic Growth. The American Economic Review, 88, 537.

Lucas, R., 1988. On the Mechanics of Economic Development. Journal of Monetary Economics, 22(1), 3-42. doi: http://dx.doi.org/10.1016/0304-3932(88)90168-7

Rajan, R., and Zingales, L., 1996. Financial Dependence and Growth. National Bureau of Economic Research Working Paper Series, 5758, 1-4.

Robinson, J., 1952. The Generalization of the General Theory in The Rate of Interest and Other Essays. London: Macmillan. doi:http://dx.doi.org/10.1007/978-1-349-16188-1

Schumpeter, J., 1912. Theorie der Wirtschaftlichen Entwicklung (eng., The Theory of Economic Development) (R. Opie, Trans.). Leipzig: Dunker & Humblot.




How to Cite

Salnazaryan, A., & Aramyan, H. (2017). Evolving Importance of Securities Market to Ensure Economic Growth: Evidence from Armenia. Scientific Annals of Economics and Business, 64(4), 473–485. https://doi.org/10.1515/saeb-2017-0030