Stock markets and industry growth: an eastern European perspective

This paper reviews recent stock market developments in Poland and the Czech Republic and provides a case-study of the direction of causality between stock market expansion and economic growth. It finds no evidence that the relative failure of the security market in the Czech Republic affected the country’s economy. It also analyses the composition of Polish private equity offerings and finds that industries traditionally considered financially dependent were not among the largest Polish equity issuers. Instead, the growth of the Polish equity market has been driven by otherwise well-performing industries, such as residential building and commercial banking