Short-Run and Long-Run Effects of Macroeconomic Variables on Nepalese Stock Market

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Keywords:

Stock Market, NEPSE, Capital expenditure, Remittance, Autoregressive Distributed Lag, Error Correction

Abstract

This study examines the short run and long-run relationships between NEPSE Index with macroeconomic variables capital Expenditure, credit to the private sector, remittances, and Exports, using annual data from 1994 to 2023. The Autoregressive Distributed Lag (ARDL) approach was employed because of its suitability for small samples and mixed integration orders. The results confirm the existence of a long-run relationship between the variables. Capital Expenditure and private sector credit positively influence stock market performance, while remittances exhibit a negative long-run effect. The error correction mechanism indicates a rapid adjustment to equilibrium. These findings have important policy implications for promoting investment and enhancing the stability of Nepal’s financial markets.

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Author Biography

Arun Timilsina, Boston International College, Pokhara University

Arun Timilsina is an MPhil Scholar in Economics and currently a Lecturer of Economics at Boston International College, Chitwan. He holds a Master’s degree in Economics, specializing in Econometrics and Mathematical Economics, and has more than five years of teaching experience at the +2, Bachelor’s, and Master’s levels. His academic interests focus on environmental economics, agricultural economics, economic policy, sustainability, and well-being. He is particularly interested in exploring how economic policies, agricultural practices, and environmental changes influence economic and social outcomes. His research aims to generate empirical evidence and contribute to academic knowledge and policy discussions in these dynamic fields. He  is skilled in econometric analysis using EViews, STATA, and R.

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Published

2026-09-22

Issue

Vol. 3 No. 1 (2026)

Section

Research Articles

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Copyright (c) 2026 The Author(s)

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This work is licensed under a Creative Commons Attribution 4.0 International License.

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How to Cite

Timilsina, A., & Bhusal, K. P. (2026). Short-Run and Long-Run Effects of Macroeconomic Variables on Nepalese Stock Market. BIC Journal of Management, 3(1), 257-270. https://doi.org/10.3126/bicjom.v3i1.100437