Twenty-Five Years of Polish Equity Market Performance: The Questionable Force Shaping Economic Property Rights Institutions

ABSTRACT

This papere explores and quantifies the evolution of equity market performance and economic property rights dynamics in a reinstated market economy in Poland in the years 1995 to 2021. Using dynamic panel estimation techniques and monthly observations, we find evidence of convex relationships between both the wider stock market and the banking sector and property rights. The findings imply that moderately successful stock and banking markets support property rights, whereas bouts of market volatility indicate underlying preexisting economic and institutional weakness. The combined impact of fiscal policy and private debt further deteriorates institutions, suggesting capital misallocation.

JEL Classification:

• G02
• P26
• B52

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. The idea of concavity in the context of financial markets was first introduced by Cecchetti and Kharroubi’s (2012)’s study which revealed diminishing marginal returns of financial sector size.

2. In total we count 43 instrumental variables. The model specifications included in each of the tables invalidate this approach.

3. Results on demand.

4. The same comments and comparisons to Hartwells (2014) study apply.

Additional information

Notes on contributors

Anna P. Malinowska

Anna P. Malinowska PhD in finance with special focus on unconventional monetary policy impact on treasury yields during the Great Financial Crisis; Cambridge Institute for Sustainability Leadership (CISL) graduate and Sustainability and Climate Risk certificate holder (GARP SCR®). Banking sector professional with extensive sustainability risk analysis and quantification experience, experienced academic in the fields on New Institutional Economics and corporate finance and firm performance in emerging/developing markets and transition economies.