Developing Market Integration among Developed Economies: A way forward towards the Economic Growth

Abstract

The purpose of this study is to study the impact of real GDP, inflation, and exchange rates
on China’s market development during the period from 2000 to 2021. In order to get the sustainable development and economic growth, the country’s market development plays a vital role. This
premise sets the ground to check the impact of economic growth variables on market development of
China. For this purposes, various econometric techniques have been done to examine the relationship
among the study variables. Multivariate vector autoregressive (VAR) models are used to look at the
long-term relationship between market development, growth, and other important growth factors in
a high-dimensional system that is based on theory. The tests of over-identifying restrictions are used
to find co-integrating vectors. The empirical results show that there is a one-way relationship between economic growth and market development, which is different from what the previous studies
found. The findings of the study indicated that real GDP and exchange rate are positively correlated
with market development while on the other side; the inflation has found negative relationship with
market development of the China.