This study examines the capital market's impact on Bangladesh's economic growth over the decade spanning 2002 to 2012. Utilizing secondary data sourced from the Security Exchange Commission (SEC), Dhaka Stock Exchange (DSE), and the Central Bank of Bangladesh, the research analyzes the role and functionality of the capital market. The paper explores trends in key exogenous variables such as market capitalization, the all-market share index, transaction values, and inflation. By employing the ordinary least square (OLS) method of log-linear regression analysis, the study confirms that the capital market significantly influences the national Gross Domestic Product (GDP). The findings conclude that Bangladesh’s capital market has robust growth-inducing potential. To maximize this impact, the study recommends that regulatory authorities strengthen market transparency and fair trading to restore investor confidence. Furthermore, the researchers advocate for increasing market capitalization by encouraging foreign investment and introducing advanced investment instruments like derivatives, convertibles, swaps, and options to modernize the financial landscape.

Keywords: Capital Market, Economic Growth, GDP, Log-linear Regression, Market Capitalization, Bangladesh Economics, Asian University of Bangladesh.