ABSTRACT
In Chapter 5, the author analyses determinants of stock market development in selected countries (Euro Area-19 plus Great Britain) in the time frame 2000–2019. Key factors under study include: economic growth, foreign direct investment, inflation, stock market liquidity, and monetary base (M3). The constructed econometric model is estimated with the weighted ordinary least squares (WLS) method. The estimation results prove that all the determinants have a statistically significant influence on stock market development in the selected countries. Particularly, economic growth, stock market liquidity, and monetary base all have a positive statistically significant impact while inflation has a negative statistically significant impact on stock market development. The assessment is based on a literature review and econometric modelling.
