Author

  • Peter Arhenful

    • Accounting and Finance Department, Accra Technical University, Accra, Ghana
    • Ghana

  • Augustine Kwadwo Yeboah

    • Department of Multidisciplinary Studies, Ho Technical University, Ho, Ghana
    • Ghana

  • Kofi Sarfo Adjei

    • Accounting and Finance Department, Accra Technical University, Accra, Ghana
    • Ghana

Abstract

The paper assesses the effect of interest rate on stock prices, with emphases on Ghana Stock Exchange; using monthly time series data from July 2007 to December 2019. The Augmented Dickey-Fuller (ADF) test was employed to establish the stationarity properties of the data or otherwise. Using the Ordinary Least Squares (OLS) estimation technique of Multiple Regression, the results (β = – 0.891, p < 0.05) revealed an indirect association between interest rates and stock prices in the Ghanaian context; which is consistent with the theoretical conclusion that an increase in interest rate results in a decrease in stock prices. Thus, in the light of this finding, it was recommended that policymakers should consider the stock market dynamics due to the significant relationship that exists between the two macroeconomic variables.

Keywords

References

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How to Cite

Arhenful, P., Yeboah, A. K., & Adjei, K. S. (2021). Effect of Interest Rate on Stock Prices in Ghana. Journal of Social and Development Sciences, 12(1(S), 1-7. https://doi.org/10.22610/jsds.v12i1(S).3187

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Section

Research Paper

Published in

Vol. 12 No. 1(S) (2021) Governance, Youth & Economy in a Pandemic Era View issue contents

Published

2021-06-22

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