EFFECTS OF BUSINESS AND CONSUMER CONFIDENCE ON STOCK MARKET RETURNS: CROSS-SECTIONAL EVIDENCE
EFFECTS OF BUSINESS AND CONSUMER CONFIDENCE ON STOCK MARKET RETURNS: CROSS-SECTIONAL EVIDENCE

Summary/Abstract: This paper examines the effects of business and consumer confidence on stock market returns. Based on the analysis of monthly data from thirty-one countries, the results show that business and consumer confidence has a positive effect on stock market returns. The findings reveal that change in consumer confidence has a stronger effect on stock market returns across countries than the change in business confidence. The results are useful for stock market valuation, investment and risk management.

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