KRKOŠKOVÁ, Radmila. IMPACT OF STOCK MARKETS ON THE ECONOMY IN THE V4 COUNTRIES. E & M EKONOMIE A MANAGEMENT. LIBEREC 1: TECHNICAL UNIV LIBEREC, 2020, vol. 23, No 3, p. 138-154. ISSN 1212-3609. Available from: https://dx.doi.org/10.15240/tul/001/2020-3-009.
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Basic information
Original name IMPACT OF STOCK MARKETS ON THE ECONOMY IN THE V4 COUNTRIES
Authors KRKOŠKOVÁ, Radmila (203 Czech Republic, guarantor, belonging to the institution).
Edition E & M EKONOMIE A MANAGEMENT, LIBEREC 1, TECHNICAL UNIV LIBEREC, 2020, 1212-3609.
Other information
Original language English
Type of outcome Article in a journal
Field of Study 50202 Applied Economics, Econometrics
Country of publisher Czech Republic
Confidentiality degree is not subject to a state or trade secret
WWW URL
RIV identification code RIV/47813059:19520/20:A0000144
Organization unit School of Business Administration in Karvina
Doi http://dx.doi.org/10.15240/tul/001/2020-3-009
UT WoS 000570968300009
Keywords in English ADF test of stationarity; Granger causality; impulse-response analysis; stock market; VECM; V4
Tags Reviewed
Changed by Changed by: Mgr. Radmila Krkošková, Ph.D., učo 48703. Changed: 25/10/2020 07:49.
Abstract
The performance of the economy should generally reflect the performance of stock markets. Production increases, prices rise, and companies' profits increase if the economy grows. And the shares should naturally make the profits (which means among other things, higher dividends) even more attractive. But is that really true? The aim of the article is to find out the relationship between the development of stock markets and the economic growth in Visegrad Group countries (V4). The subject of the survey is both the long-term relationship and the short-term relationship in the course of economic cycles. The article uses the tools of time series econometrics, especially VECMs, including corresponding diagnostics, Granger causality and block erogeneity. The relationships between the variables examined vary from country to country. The long-term relationship between the development of stock markets and the economic growth was confirmed in Slovakia and Hungary. It was confirmed that the GDP growth rate influenced the growth rate of stock indices in all V4 countries. The opposite relationship (the stock index growth rate influences the GDP growth rate) was not confirmed only in the Czech Republic. Quarterly data for the period from 2005/Q1 to 2018/Q4 was used for the analysis. This period was selected because all of the V4 countries have been members of the European Union since 2004. The EViews software version 9 was used for the calculations. Variables used in this research are: the GDP, the stock exchange index of the country and stock trading volume. The PX, SAX, BUX and WIG20 stock indices are considered to be the crucial representatives of individual stock markets in this work.
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