The Stock Market Situation and Economic Growth – An Attempt to Assess the Dependence

Michał Radke

doi:10.18778/2391-6478.4.32.08

Autor

Michał Radke University of Lodz, Faculty of Economics and Sociology https://orcid.org/0000-0001-9252-5362

DOI:

https://doi.org/10.18778/2391-6478.4.32.08

Słowa kluczowe:

capital markets, European stock exchanges, GDP, stock index

Abstrakt

The aim of the article: The main aim of the article is to analyze the relationship between the stock market situation and the real economy, measured by the strength of the correlation between the rate of return on the stock market and the rate of GDP growth in European capital markets. The next objective is to answer the question whether the stock market index changes are ahead of, and if so, by how much, GDP changes. The author’s hypothesis stipulates that the stock exchange situation precedes the change in economic activity and serves as its forecast.

Methodology: The empirical research work was carried out on the basis of quarterly data value of the stock index and the GDP between 2010 and the first quarter of 2021 for 20 European countries. For indices and GDP, the quarterly dynamics of the rate of return and GDP were calculated. Data on the value of the stock exchange index was taken from the website www.stooq.pl, while data on GDP was taken from Eurostat. Subsequently, the analysis concerned the correlation relationships between the variables on the basis of the Pearson correlation coefficient. The correlation between the variables was calculated without delay, as well as with a delay of one, two or three quarters of the returns on stock indices.

Results of the research: Changes in the value of the stock exchange index is in most cases positively correlated with the change in GDP and the correlation is pronounced, but it is low and moderate. The only market for which a significant correlation was observed, was the Polish market. At the same time, it can be stated that the rates of return on the stock exchange index precede a change in GDP by one or three quarters. No changes were observed for the analyzed countries for two quarters.

Pobrania

Brak dostępnych danych do wyświetlenia.

Bibliografia

Adamopoulos, M. (2010). Stock market and economic growth: an empirical analysis for Germany. Business and Economics Journal, 2010: BEJ-1.
Google Scholar

Adebayo, T.S., Awosusi, A.A. and Eminer, F. (2020). Stock Market-Gtowth Relationship in an Emerging Economy: Empirical Finding from ARDL Based Bounds and Causality Approaches. Journal of Economics and Business, 3(2).
Google Scholar DOI: https://doi.org/10.31014/aior.1992.03.02.247

Boubakari, A. and Jin, D. (2010). The Role of Stock Market Development in Economic Growth: Evidence from Some Euronext Countries. International Journal of Financial Research, 1(1).
Google Scholar DOI: https://doi.org/10.5430/ijfr.v1n1p14

Cooray, A. (2010). Do stock markets lead to economic growth? Journal of Policy Modeling, 32.
Google Scholar DOI: https://doi.org/10.1016/j.jpolmod.2010.05.001

Dębski, W. and Bujnowicz, I. (2008). Modele współzależności rozwoju systemu finansowego i wzrostu gospodarczego w Polsce. Rynek kapitałowy. Skuteczne inwestowanie, Studia i Prace Wydziału Nauk Ekonomicznych z Zarządzania, 9.
Google Scholar

Durham, J.B. (2002). The effect of stock market development on growth and private investment in lower- income countries. Emerging Markets Review, 3.
Google Scholar DOI: https://doi.org/10.1016/S1566-0141(02)00022-5

Enisan, A.A. and Olufisayo, A.O. (2009). Stock market development and economic growth: Evidence from seven sub-Sahara African countries. Journal of Economics and Business, 61.
Google Scholar DOI: https://doi.org/10.1016/j.jeconbus.2008.05.001

FTSE Russell, FTSE Country Classification of Equity Markets (March 2021), https://research.ftserussell.com/products/downloads/FTSE_Interim_Country_Classification_Review_2021.pdf [Accessed: 14.07.2021].
Google Scholar

Gajdka, J., Brzeszczyński, J. and Schabek, T. (2009). Koniunktura giełdowa a zmiany w realnej sferze gospodarki w Polsce. Przegląd Organizacji, 7–8.
Google Scholar DOI: https://doi.org/10.33141/po.2009.78.01

Gajdka, J. and Pietraszewski, P. (2014). Wzrost gospodarczy a ceny akcji. Zeszyty Naukowe Uniwersytetu Szczecińskiego nr 804: Finanse, Rynki Finansowe, Ubezpieczenia, 67.
Google Scholar

Goczek, Ł., Kurowska, K. and Zduniuk, K. (2014). Rozwój rynków kapitałowych i wzrost gospodarczy w krajach Europy Środkowo‐Wschodniej. Roczniki Kolegium Analiz Ekonomicznych Szkoły Głównej Handlowej, 34.
Google Scholar

Harris, R.D.F (1997). Stock market and development: A reassessment. European Economic Review, 41.
Google Scholar DOI: https://doi.org/10.1016/S0014-2921(96)00021-9

Kasprzak-Czelej, A. (2012). Giełdowy rynek akcji a gospodarka. Warszawa: Difin.
Google Scholar

Liu, X. and Sinclair, P. (2008). Does the linkage between stock market performance and economic growth vary across Greater China? Applied Economics Letters, 15(7).
Google Scholar DOI: https://doi.org/10.1080/13504850500426277

Kachniewski, M., Majewski, B. and Wasilewski, P. (2008). Giełda Papierów Wartościowych i rynek kapitałowy. Warszawa: Fundacja Edukacji Rynku Kapitałowego.
Google Scholar

Łon, E. (2006). Makroekonomiczne uwarunkowania koniunktury na polskim rynku akcji w świetle doświadczeń międzynarodowych (Prace Habilitacyjne nr 23). Poznań: Akademia Ekonomiczna w Poznaniu.
Google Scholar

Łon, E. (2020). Indeksy branżowe notowane na GPW w Warszawie jako barometry polskiej gospodarki. Pieniądze i Więź, 3(88).
Google Scholar

Minier, J. (2009). Opening a stock exchange. Journal of Development Economics, 90.
Google Scholar DOI: https://doi.org/10.1016/j.jdeveco.2008.10.002

Obiakor, R.T. and Okwu, A.T. (2011). Empirical analysis of impact of capital market development on Nigeria’s economic growth (1981–2008) (case study: Nigerian Stock Exchanged). DLSU Business & Economies Review, 20.2.
Google Scholar DOI: https://doi.org/10.3860/ber.v20i2.1915

Odhiambo, N.M. (2011). Financial intermediaries versus financial markets: A South African experience. International Business & Economics Research Journal, 10(2).
Google Scholar DOI: https://doi.org/10.19030/iber.v10i2.1795

Pagano, M., Randl, O., Röell, A.A. and Zechner, J. (2001). What makes stock exchanges succeed? Evidence from cross-listing decisions. European Economic Review, 45(3).
Google Scholar DOI: https://doi.org/10.1016/S0014-2921(01)00132-5

Rahman, M.M. and Salahuddin, M. (2010). The determinants of economics growth in Pakistan: Does stock market development play a major role? Economics Issues, 15(2).
Google Scholar

Rousseau, P.L. and Wachtel, P. (2000). Equity markets and growth: Cross-country evidence on timing and outcomes, 1980–1994. Journal of Banking & Finance, 24.
Google Scholar DOI: https://doi.org/10.1016/S0378-4266(99)00123-5

Starzyńska, W. (2009). Podstawy statystyki. Warszawa: Difin.
Google Scholar

Widz, E. (2016). Wahania indeksów giełdowych a wahania koniunktury gospodarczej w Polsce. Acta Universitatis Lodziensis, Folia Oeconomica, 4(323).
Google Scholar DOI: https://doi.org/10.18778/0208-6018.323.11

Wiktorowicz, J., Grzelak, M.M. and Grzeszkiewicz-Radulska, K. (2020). Analiza statystyczna z IBM SPSS Statistics. Łódź: Wydawnictwo Uniwersytetu Łódzkiego.
Google Scholar DOI: https://doi.org/10.18778/8220-387-5

[www1] https://stooq.pl [Accessed 15.07.2021].
Google Scholar

[www2] https://ec.europa.eu/eurostat/web/national-accounts/data/database [Accessed 15.07.2021].
Google Scholar