Analyzing the Relationship Between Stock Market Capitalization (SET100) and Economic Growth (GDP) in Thailand: A 19-Year Perspective
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Abstract
The objectives of this study were to analyze the correlation between SET100 market size expansion and economic growth; to investigate the influences of the stock market size on listed companies in the SET100 index. GDP was estimated by using secondary data from stock market capitalization for SET100 companies from the Stock Exchange of Thailand (SET) and GDP from the Office of the National Economic and Social Development Council (NESDC). The statistics included correlation analysis and multiple linear regression analysis, which were used to analyze the levels of the relationship and the impact of stock market capitalization on GDP.
The findings revealed a robust positive correlation between SET100 market capitalization and GDP (r = 0.977, p < .01). Regression analysis showed that SET100 and a dummy variable (DM), representing the occurrence of economic crises, had regression coefficients of 0.860 and -1.171, respectively. This suggests that a 1-trillion-baht increase in SET100 capitalization is associated with an average increase of 0.860 trillion baht in GDP, while economic crises can lead to a GDP contraction of 1.171 trillion baht. The model’s R2Value was 0.968, suggesting that SET100 and the dummy variable explain 96.8% of GDP variance at a statistical significance level of .01. These results underscore the potential of SET100 as a reliable predictor of GDP in Thailand
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