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2.2 Conclusion 
Previous literature done by previous researchers has provided us a space to be 
more understand on the relationship between some of macroeconomic variables and 
stock returns and the impact of macroeconomic variables on stock market return, so 
according to the previous literatures, this study chooses these four macroeconomic 
variables to examine that whether these four variables can impact the banking 
industry stock return in Chinese stock market. Hence, the conceptual framework is set 
as below: four macroeconomic variables are inflation rate, exchange rate, money 
supply and interest rate which are the independent variables, it will investigate the 
impact of each variable on the banking industry stock return. And the study employs 
market returns which from Shanghai market return and Shenzhen market return as 
control variables to examine when put the market return be the control variable, then 
the macroeconomic variables have the impact to the banking industry stock return or 
not. And each variable has the literature supporting, but until now, this study cannot 
find out any literature study on the Shenzhen stock market return. So the study sets 
the conceptual framework as below: 

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Conceptual Framework 
 
Macroeconomic Factors 
1. Inflation Rate 
Tan and Floros (2012) 
Gultekin (1983) 
2. Exchange Rate 
Choi, Elyasiani and 
Kopecky,1992 
Joseph and Vezos, 2006 
3. Money Supply 2 
Zatul and Mohamed, 2007 
Muradoglu and Metin,1996 
4. Interest Rate 
Yourougon,1990 
Zhu and Li, 2007 
 
 
 
 
 
 
 
 
 
Control factor 
1. Market returns 
¾ ShangHai Market return
Wang, 2011 
¾ ShenZhen Market return 
Banking industry stock 
return 

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