Stock Market Responses to Macroeconomic Variables Across Development Stages: Evidence from Ghana, South Korea, and the United States

Purpose - This study examines how macroeconomic variables affect stock market returns across different development stages, analyzing Ghana (developing), South Korea (emerging), and the United States (developed) markets. Design/methodology/approach - Using monthly data from 2003-2023, we employ time-series regression analysis to investigate relationships between stock returns and macroeconomic indicators including inflation, interest rates, money supply, exchange rates, and industrial production. Findings - Results reveal distinct patterns across development stages. Ghana shows significant positive relationships with inflation and strong momentum effects. Korea shows no significant relationships with domestic macroeconomic variables. The U.S. market responds to term structure of interest rates, industrial production, and money supply. Cross-market analysis reveals asymmetric relationships: U.S. macroeconomic conditions influence Korean markets, Korean inflation correlates with Ghanaian returns, but reverse spillovers are limited. International transmission operates primarily through macroeconomic channels rather than direct stock market returns. Research implications or Originality - The study documents how market development stages relate to macroeconomic sensitivities and reveals the asymmetric nature of international linkages. The findings contribute to understanding market efficiency variations across development stages and the channels of international financial transmission.