مجلة الإقتصاد الجديد
Volume 17, Numéro 1, Pages 27-40
2026-01-01
Business Freedom And Market Efficiency: Evidence From Gcc Stock Markets
Authors : Boudjemala Anissa . Aissa Nadjet .
Abstract
This study examines the effects of Business Freedom (BF) on financial market liquidity in six GCC countries, using market capitalization turnover as a proxy for liquidity. Employing panel ARDL (PMG) on data covering the period 2000-2024 for 6 GCC countries, the results reveal that business freedom has a positive and highly significant long-run impact on liquidity, confirming that improvements in regulatory and business environments enhance market efficiency. Short-run effects are heterogeneous across countries, with Bahrain responding immediately to business freedom reforms and Saudi Arabia with delay, while others exhibit insignificant effects. Interestingly, the interaction between business freedom and Internet penetration is negative in most countries, suggesting that while digital infrastructure facilitates information flow, it may initially moderate the short-run effect of regulatory improvements due to volatility or cautious investor behavior. These findings highlight the critical role of regulatory reforms and digital connectivity in promoting efficient and liquid financial markets. The study provides actionable policy implications, emphasizing the need for coordinated efforts to improve business freedom and digital infrastructure to maximize both short- and long-term market performance.
Keywords
Business Freedom ; Market Effeciency ; Liquidity ; GCC
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