Elements indicating stock price movements: the case of the companies listed on the V4 stock exchanges

    Florin Aliu   Affiliation
    ; Orkhan Nadirov   Affiliation
    ; Artor Nuhiu   Affiliation


Stock markets stand as a financial mechanism that provides liquidity for firms and offers diversification benefits for investors. Stock markets in the Eastern European countries are weakform efficient which exposes them to speculative prices. This study investigates the influence of the macroeconomic and firm-specific factors on stock prices of the listed companies within the Visegrad Stock Markets. The study employs regression analyses based on a Pooled OLS and Fixed Effect models with year dummies and standard errors clustered at the country level, which are robust to autocorrelation and heteroscedasticity. Data collection consists of 55 listed companies based on the weekly stock prices, from January 2013 till December 2018. The results indicate that total equity is the only significant element that influences the individual stock prices of the companies in the four established models. Additionally, increase in supply of shares declines the current stock prices and the other way around. However, the exchange rate and inflation level indicate a negative influence on the stock prices with weaker significance. The findings show that stock markets of the V4 countries are overall inefficient since important indicators, such as economic activity, debt level, cash flow, firm size, oil, and gold prices have limited influence on the stock price movements.

Keyword : stock prices, financial indicators, macroeconomic indicators, Visegrad countries, Pooled OLS, fixed effects

How to Cite
Aliu, F., Nadirov, O., & Nuhiu, A. (2021). Elements indicating stock price movements: the case of the companies listed on the V4 stock exchanges. Journal of Business Economics and Management, 22(2), 503-517.
Published in Issue
Feb 10, 2021
Abstract Views
PDF Downloads
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.


Aliu, F., Krasniqi, B., Knapkova, A., & Aliu, F. (2019). Interdependence and risk comparison of Slovak, Hungarian and Polish stock markets: Policy and managerial implications. Acta Oeconomica, 69(2), 273−287.

Anari, A., & Kolari, J. (2001). Stock prices and inflation. Journal of Financial Research, 24(4), 587−602.

Apergis, N., & Eleftheriou, S. (2002). Interest rates, inflation, and stock prices: The case of the Athens stock exchange. Journal of Policy Modeling, 24(3), 231−236.

Bahmani-Oskooee, M., & Saha, S. (2016). Do exchange rate changes have symmetric or asymmetric effects on stock prices? Global Finance Journal, 31, 57−72.

Bams, D., Blanchard, G., Honarvar, I., & Lehnert, T. (2017). Does oil and gold price uncertainty matter for the stock market? Journal of Empirical Finance, 44, 270−285.

Boţoc, C., & Anton, S. G. (2020). New empirical evidence on CEE’s stock markets integration. The World Economy, 43(10), 2785–2802.

Bulmash, S. B., & Trivoli, G. W. (1991). Time–lagged interactions between stocks prices and selected economic variables. The Journal of Portfolio Management, 17(4), 61−67.

Campbell, J. Y., & Shiller, R. J. (1988). The dividend-price ratio and expectations of future dividends and discount factors. The Review of Financial Studies, 1(3), 195−228.

Cera, G., Aliu, F., & Cera, E. (2019). Value at risk estimation of the market indexes via GARCH model: Evidence from Visegrad countries. In Economic and Social Development (ESD): 39th International Scientific Conference on Economic and Social Development – Sustainability from an Economic and Social Perspective (pp. 153–163). Varazdin Development & Entrepreneurship Agency.

Daoud, J. I. (2017). Multicollinearity and regression analysis. Journal of Physics: Conference Series, 949, 012009.

DeFond, M., Mingyi, H., Li, S., & Li, Y. (2015). Does mandatory IFRS adoption affect crash risk? The Accounting Review, 90(1), 265−299.

Dimitropoulos, P. E., & Asteriou, D. (2009). The value relevance of financial statements and their impact on stock prices: Evidence from Greece. Managerial Auditing Journal, 24(3), 248−265.

Drummen, M., & Zimmermann, H. (1992). The structure of European stock returns. Financial Analysts Journal, 48(4), 15−26.

Dzikevičius, A., & Šaranda, S. (2011). Can financial ratios help to forecast stock prices? Journal of Security and Sustainability Issues, 1(2), 147–157.

Fama, E. F. (1968). Risk return and equilibrium: Some clarifying comments. The Journal of Finance, 23(1), 29−40.

Fama, E. F., & French, K. R. (1993). Common risk factors in the returns on stocks and bonds. Journal of Financial Economics, 33(1), 3−56.

Filip, A., & Raffournier, B. (2010). The value relevance of earnings in a transition economy: The case of Romania. The International Journal of Accounting, 45(1), 77−103.

Gilmore, C. G., & McManus, G. M. (2003). Random-walk and efficiency tests of Central European equity markets. Managerial Finance, 29(4), 42−61.

Hanousek, J., & Filer, R. K. (2000). The relationship between economic factors and equity markets in Central Europe. Economics of Transition, 8(3), 623−638.

Ho, S. Y. (2019). Macroeconomic determinants of stock market development in South Africa. International Journal of Emerging Markets, 14(2), 322−342.

Horobet, A., & Dumitrescu, S. (2009). On the causal relationships between monetary, financial and real macroeconomic variables: Evidence from Central and Eastern Europe. Economic Computation & Economic Cybernetics Studies & Research, 43(3), 1−17.

Hsiao, C. (2005). Why panel data? The Singapore Economic Review, 50(2), 143−154.

Irfan, C. M., & Nishat, M. (2002). Key fundamental factors and long-run price changes in an emerging market – a case study of Karachi stock exchange (KSE). The Pakistan Development Review, 41(4), 517–533.

Jain, A., & Biswal, P. C. (2016). Dynamic linkages among oil price, gold price, exchange rate, and stock market in India. Resources Policy, 49, 179−185.

Kulhánek, L. (2012). The relationship between stock markets and gross domestic product in the Central and Eastern Europe. In Proceedings of the 7th International Conference on Currency: Banking and International Finance – How Does Central and Eastern Europe Cope up with the Global Financial Crisis (pp. 135−145). University of Economics in Bratislava.

Ligocká, M., & Stavárek, D. (2019). The relationship between financial ratios and the stock prices of selected European food companies listed on stock exchanges. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 67(1), 299−307.

Malkiel, B. G., & Fama, E. F. (1970). Efficient capital markets: A review of theory and empirical work. The Journal of Finance, 25(2), 383−417.

Nieh, C. C., & Lee, C. F. (2001). Dynamic relationship between stock prices and exchange rates for G-7 countries. The Quarterly Review of Economics and Finance, 41(4), 477−490.

Novotny, J., & Hanousek, J. (2013). Price jump behavior during financial distress: Intuition, analysis and a regulatory perspective. In M. Arouri, S. Boubaker, & D. K. Nguyen (Eds.), Emerging markets and the global economy: A handbook (pp. 483−507). Academic Press, Elsevier.

Olbryś, J., & Majewska, E. (2015). Bear market periods during the 2007–2009 financial crisis: Direct evidence from the Visegrad countries. Acta Oeconomica, 65(4), 547−565.

Pop, I. (2020). An overview of Central and Eastern European capital markets – similarities and contrasts between Poland, Romania, Croatia and Hungary. Revista Economică, 72(2), 45–57.

Pražák, T., & Stavárek, D. (2017). The relationship between stock market development and macroeconomic fundamentals in the Visegrad group, Comparative Economic Research, 20(3), 5−23.

Ratanapakorn, O., & Sharma, S. C. (2007). Dynamic analysis between the US stock returns and the macroeconomic variables. Applied Financial Economics, 17(5), 369−377.

Raza, N., Shahzad, S., Tiwari, A., & Shahbaz, M. (2016). Asymmetric impact of gold, oil prices and their volatilities on stock prices of emerging markets. Resources Policy, 49, 290−301.

Roodman, D. (2009). How to do xtabond2: An introduction to difference and system GMM in Stata. The Stata Journal, 9(1), 86–136.

Salmerón-Gómez, R., García-Pérez, J., López-Martín, M. D. M., & García, C. G. (2016). Collinearity diagnostic applied in ridge estimation through the variance inflation factor. Journal of Applied Statistics, 43(10), 1831–1849.

Schotman, P. C., & Zalewska, A. (2006). Non-synchronous trading and testing for market integration in Central European emerging markets. Journal of Empirical Finance, 13(4–5), 462−494.

Singhal, S., Choudhary, S., & Biswal, P. C. (2019). Return and volatility linkages among International crude oil price, gold price, exchange rate and stock markets: Evidence from Mexico. Resources Policy, 60, 255−261.

Somoye, R. O. C., Akintoye, I. R., & Oseni, J. E. (2009). Determinants of equity prices in the stock markets. International Research Journal of Finance and Economics, 30(13), 177−189.

Syriopoulos, T. (2007). Dynamic linkages between emerging European and developed stock markets: Has the EMU any impact? International Review of Financial Analysis, 16(1), 41−60.

Shiller, R. (2001). Irrational Exuberance. Broadway Books.

Stereńczak, S. (2020). State-dependent stock liquidity premium: The case of the Warsaw Stock Exchange. International Journal of Financial Studies, 8(1), 13.

Tursoy, T., & Faisal, F. (2018). The impact of gold and crude oil prices on stock market in Turkey: Empirical evidences from ARDL bounds test and combined cointegration. Resources Policy, 55, 49−54.

Uddin, M. B. (2009). Determinants of market price of stock: A study on bank leasing and insurance companies of Bangladesh. Journal of Modern Accounting and Auditing, 5(7), 1−12.

Uwuigbe, U., Olusegun, O., & Agu, G. (2012). An assessment of the determinants of share price in Nigeria: A study of selected listed firms. ACTA Universitatis Danubius, 8(6), 78−88.

Vveinhardt, J., Streimikiene, D., Ahmed, R., Ghauri, S., & Ashraf, M. (2017). Asymmetric influence of Oil and Gold Prices on Baltic and South Asian Stock Markets: Evidence from Johansen Cointegration and ARDL Approach. Acta Montanistica Slovaca, 22(4), 422−438.

Yoo, W., Mayberry, R., Bae, S., Singh, K., He, Q. P., & Lillard, J. W. (2014). A study of effects of multicollinearity in the multivariable analysis. International Journal of Applied Science and Technology, 4(5), 9−19.