The Impact of Interest Rates on Stock Returns: A Systematic Literature Review and Bibliometric Analysis (2021–2025)

Abstract

Purpose: This study aims to examine the development of research trends, intellectual structures, and empirical conclusions concerning the impact of interest rates on stock returns, with a particular focus on recent academic contributions amid global economic uncertainty.
Method: This research adopts a systematic literature review (SLR) approach using secondary data obtained from peer-reviewed journal articles indexed in the Scopus database and published between 2021 and 2025. The article selection process follows the PRISMA framework, encompassing identification, screening, eligibility, and inclusion stages, which resulted in a final sample of 34 relevant studies from an initial pool of 175 records. Bibliometric analysis and network visualization techniques were applied using VOSviewer to analyze publication trends, geographical distribution, influential institutions and journals, author collaboration networks, and keyword co-occurrence patterns.
Finding: The findings reveal a significant increase in scholarly attention to the relationship between interest rates and stock returns in recent years, driven by heightened global economic uncertainty, monetary policy tightening, and post-pandemic market volatility. Empirical evidence consistently indicates that rising interest rates tend to exert a negative effect on stock returns through increased capital costs and declining equity valuations. However, the strength and direction of this relationship vary across economic cycles, sectors, and market conditions. The analysis also shows that while research is predominantly concentrated in developed economies, emerging markets—particularly Indonesia—are increasingly contributing to empirical studies in this field.
Novelty: The novelty of this study lies in integrating systematic literature review procedures with comprehensive bibliometric and network analyses, offering a structured and holistic understanding of interest rate–stock return dynamics while identifying key research trends, gaps, and policy-relevant insights for future financial market research.