International Science Community Association International Research Journal of Social Sciences 2319 7 6 2018 06 14 Stock markets and economic growth 30 33 EN Kajenthini Ganeshamoorthy 1 Department of Economics, Faculty of Commerce and Management, Eastern University, Sri Lanka Prasad Serasinghe 2 University of Colombo, Sri Lanka Shamna Thacha Paramban 1 Department of Economics, Dr. John Matthai Centre, University of Calicut, Thrissur, Kerala, India Yasir Aleem Fatiana 1 School of Law, Universiti Utara, Malaysia Harlida Abdul Wahab 2 School of Law, Universiti Utara, Malaysia Rohizan Halim 3 School of Law, Universiti Utara, Malaysia Srishti Tamrakar 1 Department of Management Studies, Guru Ghasidas Vishwavidyalaya, Bilaspur, Chhattisgarh, India Harsha Sahu 2 Department of Management Studies, Guru Ghasidas Vishwavidyalaya, Bilaspur, Chhattisgarh, India Nidhi Monika Sharma 1 Bhilai Mahila Mahavidyalaya, Bhilai, CG, India Zehra Hasan 2 Bhilai Mahila Mahavidyalaya, Bhilai, CG, India > Short Review Paper 2018 2 22 2018 06 14 Capital market is the centre or arrangement that provides facilities for buying and selling of long-term financial claims. It is the market where transactions are made in long- term securities such as stocks and bonds. The participants of this market includes various financial institutions, mutual funds, agents, brokers, dealers and other borrowers and lenders of long-term debt and equity capital. Capital market is not a compact unit but consists of two major parts: Primary Market and Secondary market. The initial emergence of stock markets in the world can be traced back over hundreds of years to when industrialization and innovation took hold in Europe. The rapid economic growth in the past one hundred years gave rise to the explosive development of stock markets. At the same time the enhancement of stock markets has played an important role in promoting the growth of the world economy. The modern market economy depends to a greater extent on a sound operated stock market. Stock market provides liquidity to the financial instruments which are issued in the primary market. Copyright@ International Science Community Association