MARKET CAPITALIZATION IN THE US- LESSONS FOR EMERGING ECONOMIES
Nahabwe Patrick Kagambo John, Kagarura Willy Rwamparagi
Kabale University, Kabale, Uganda
Abstract
This study examines trends in market capitalization of listed domestic companies in the United States from 1975 to 2022 using an autoregressive integrated moving average (ARIMA) modeling approach. Time-series data sourced from the World Bank employs market capitalization of listed domestic companies (% of GDP) as the dependent variable, with autoregressive (AR) and moving average (MA) components as independent variables. Parameter estimation through conditional least squares (CLS) reveals a negative and statistically significant MA(5) coefficient (-0.844272), indicating that approximately 84.4% of past shocks persistently affect market capitalization. Projections based on ARIMA(1,1,5) model suggest a sustained average annual increase in market capitalization from 180.3% in 2023 to 230.3% by 2045. The findings highlight the importance of stable financial markets, effective regulatory frameworks, and capital market depth in driving market capitalization growth. Emerging economies are encouraged to adopt similar market-strengthening strategies to enhance their capital market performance and overall economic stability.
Keywords: Arima Modeling, Market Capitalization, Us
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International Journal of Global Economic Light (JGEL)
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Published on : 2025-03-27
Vol | : | 11 |
Issue | : | 3 |
Month | : | March |
Year | : | 2025 |