Examining the Role of Property Rights Protection and Stock Market Development in Stimulating Total Factor Productivity A Case Study of Selected Low Middle Income Countries

Abstract

This paper assesses a two-step procedure to examine whether intellectual property rights effects stock market development. Furthermore, does this impact on stock market development stimulate productivity growth? The study demonstrates the impact of intellectual property rights and stock market development in stimulating productivity growth for selected low middle income countries taking the sample period of 1995-2015. The analysis suggests that stronger implication of intellectual property rights brings more investment, which eventually helps to develop businesses. This establishment of businesses results into, firms enlisting their shares on the stock market in order to expand business and hence contributing toward enhancement of productivity growth. For stock market development the study uses stock market capitalization as a proxy measure, the improvement in stock market development through intellectual property rights resulted into a positive and significant impact on productivity growth giving strength to the notion of better the finance, more will be the growth.