Abstract:
The study assessed the relationship among macroeconomic variables, control of corruption and stock market returns in Ghana. The specific objectives were to first analyse the relationship between macroeconomic variables and stock market return and also to examine whether control of corruption influences such relationship. Data on stock market returns, inflation, money supply and GDP were sourced from the International Monetary Fund Website, Ghana Stock Exchange and World Bank and Worldwide governance indicators for the period 1996 to 2018. Quantitative research method was employed as the approach and the explanatory research design was used. The data collected were analyzed using autoregressive distributed lag (ARDL) model and the bound’s test. The overall conclusion deduced from this study is that there is a long run and short run relationship among macroeconomic variables and stock market return in Ghana. In the short run, the study concludes that money supply has a significant positive influence on stock market return while inflation negatively influences stock market return. In the long run, the study concludes that inflation has a negative effect on stock market returns while GDP and money supply had a significant negative effect on stock market returns. Finally, corruption enhances the positive effect of all the macroeconomic variables on stock market returns. The study recommends that both current and potential investors should pay close attention to the inflation, money supply, GDP and corruption dynamics before making investment on the Ghanaian Stock exchange.
