DefinePK

Abstract

This study investigates the relationship between market capitalization and economic growth in Egypt from 2002-2021. It estimates the mediating role of market capitalization in economic growth and other macroeconomic variables. The study found mixed order of integration among variables, with most being marginally significant. Factors such as FDI, gross fixed capital formation, consumption expenditures, GDP per employed person, and market capitalization positively impact GDP growth rate. The study recommends implementing policies to attract and facilitate foreign direct investment, encourage domestic and foreign investment in physical assets, and boost consumer spending. Policies should also focus on fostering a robust and transparent financial market.