Interaction between the public attitudes and the stock exchange dynamics in Southeastern European countries Cover Image
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Взаимодействие между обществените нагласи и борсовата динамика на страните от Югоизточна Европа
Interaction between the public attitudes and the stock exchange dynamics in Southeastern European countries

Author(s): Vladimir Tsenkov, Ani Stoitsova-Stoykova
Subject(s): Economy, Financial Markets
Published by: Институт за икономически изследвания при Българска академия на науките
Keywords: capital markets; public expectations; Granger causality test; South-East Europe; Efficient Market Hypothesis; the real business-cycle theory

Summary/Abstract: The relationship between the dynamics of the capital markets of Bulgaria, Croatia, Greece, Slovenia, Turkey, Romania and Macedonia and the public attitudes expressed by the inflation expectation indicators, consumer and business confidence indicators for the period 2005-2015 is analyzed. The results obtained on the Granger causality emphasize the interaction between business confidence and capital markets, and its direction depends on the degree of market development. The dependence in the more developed markets of Turkey, Greece and Croatia is in line with the assumptions of the efficient markets hypothesis (EMH) and on the influence line of "business confidence - a capital market". Reverse dependence is seen in the less developed markets of Bulgaria, Macedonia, Romania and Slovenia. In addition to an inefficiency according to EMH and the theory of real business cycles, this could also be regarded as a prerequisite for strengthening negative market trends and bringing instability to the market in times of crisis. The degree of development of the capital markets also determines their relationship with consumer confidence as in the more developed markets it is directed to the capital markets and in the case of the less developed ones in the opposite direction.

  • Issue Year: 2017
  • Issue No: 3
  • Page Range: 93-111
  • Page Count: 19
  • Language: Bulgarian