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THE BALTIC STATES’ STOCK MARKET DEVELOPMENT DYNAMICS
Abstract
Well-functioning financial markets are crucial in creating strong economic environment, determined by stock market size, capitalization, and also banking development, which can forecast the improvements in growth and productivity. Access to sustainable financing could benefit equally to companies and also environment. Stock market is an alternative source of funding to banks, when they are cautious in lending to businesses, especially during various crises. The research aim is to analyze stock market capitalization gap in the Baltic States. Research was performed on the stock market development in the Baltic States for years 2008- 2021. It was determined that the stock market listed companies’ market capitalization in Baltic States overall has increased from 5177 mill.EUR in 2008 to 11613 mill.EUR in 2021 (an increase of 2.2 times) while their number has decreased from 95 to 74 (decrease by 21 companies or 22%). However, the in-depth analysis of newly listed and delisted companies uncovered a trend, that there was a gap in the stock market capitalization of the Baltic States of 1472 mill.EUR, which was mainly attributed by the gap in the capitalization value arising on the stock exchange in Latvia. Lesser capitalization gap was in Lithuania, where larger companies left stock market compared to ones that commenced listing, while overall capitalization value of stock market in Lithuania increased. However, the market capitalization surplus and the average value of companies newly listed on the stock exchange have increased in Estonia. Thus, the trends are detrimentally worsening economic environment and access to funding in Latvia.
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