Examining the Effect of the Value of Shares Traded as Ratio of GDP on Economic Growth in Kenya from 1985-2020.

  • Purity Wambui GACHUGU; Aquilars KALIO; Lawrence K. KIBET. (1)(2)(3) Egerton University, Kenya.
Keywords: Economic growth, Gross Domestic Product (GDP), Terms of Trade and values of shares, Traded.


The study aims at examining the effect of the value of shares traded as a ratio of GDP on economic growth in Kenya from 1985-2020. The study was based on financial intermediation theory backed up by other theories related to financial deepening. The study adopted a historical research design. An Autoregressive bivariate model (bVAR) was used in the study. Inferential statistics and descriptive are used in data analysis. This study was conducted in Kenya for the period 1985 to 2020. The study uses a historical research design. Descriptive statistics such as standard deviation, mean and correlation are calculated. Tables and graphs are also used to present the results. Inferential statistics help make inferences and predictions of a population based on the selected sample. The study established a positive effect of the value of the traded share on economic growth both in the long run and in the short run in Kenya. The study recommends that the Kenyan government create policies that would foster participation in the stock market by Kenyan investors and foreign investors.