THE IMPACT OF DIGITALIZATION, INFLATION AND INTEREST RATES ON STOCK MARKET PERFORMANCE: EVIDENCE FROM EMERGING ECONOMIES

Abstract

This paper seeks to explore how digitalization, inflation and interest rates in the emerging markets work on stock market performance from 2013 till 2024. Using a quantitative research design, the research uses a time series methodology for analyzing 10 countries of interest. These countries include Brazil, China, India, Russia, and South Africa (BRICS) as well as Indonesia, Mexico, Thailand, Turkey, and Vietnam. The data was collected from national stock exchanges, the World Bank, and the International Telecommunication Union (ITU). The dependent variable is stock market index returns while the independent variables are internet penetration rate, inflation rate, and interest rate. Using the panel data methods, the study found significant relationships between these independent variables and stock market performance. There is a significantly negative effect of inflation and internet penetration on the stock market performance. On the other hand, no significant relationship could be found for the interest rate. This study adds value to the literature by offering empirical evidence in support of the interaction between economic indicators and stock markets.