STOCK MARKETS AND THE PERFORMANCE OF THEIR ECONOMIES IN THE INDUSTRY 4.0 CONTEXT: A CROSS-COUNTRY EUROPEAN ANALYSIS (2012-2022)

Abstract

This research paper analyses a series of indicators which characterize eight European capital markets and their respective countries during 2012-2022, as well as the relationship between capital markets’ size and economy. Capital markets play a vital role in facilitating capital flows, supporting investment projects, and contributing to economic growth. Vice versa, macroeconomic influence on the capital markets is also thoroughly researched and the respective paper sets grounds for further analysis of the link between the two: macroeconomy and capital markets. When discussing capital markets, variables we look at usually measure its size, in terms of market capitalization, or its relative size to the economy, as market capitalization to GDP, used more often as comparable between markets. One can note that the recovery after the global financial crisis was different by country or region, with various speeds of growth. On the contrary, COVID-19 pandemic hit all the markets disregard of the size or stage of development. All countries recorded increase in the GDP during the analysed period, largest being for Poland and Hungary. The size of capital markets in nominal values increased in 5 out of 8 markets, leaving on the negative territory market capitalization of Spain, United Kingdom, and Poland. Largest size growth of the capital markets was in Romania

Keywords

• stock markets; capital markets development; european markets; macroeconomic development; industry 4.0