IMPACT OF ECONOMIC GROWTH ON SHARE PRICE IN TANZANIA:

Abstract

This paper aimed to investigate the impact of economic growth on the share price in Tanzania, the case of Tanzania Breweries Limited. The study used time series data from 1999 to 2020. The study used secondary data on economic growth and share price. The Granger causality test was conducted to establish the causal relationship between the variables, while the Johansen test was conducted to establish cointegration. The empirical tests results show a bidirectional causality between economic growth (GDP) and the share price of Tanzania Breweries. The analysis also brought to light that there is a positive relationship between the variables, but this effect would be evident in the long term in the economy of Tanzania. The study further recommends that the government and policymakers ensure that bottlenecks that restrict or slow down development in some of the dimensions of the stock market are improved.