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Companies' growth vs. growth opportunity: Evidence from the regular and alternative stock markets in Poland

Author

Listed:
  • Monika Bolek

    (Department of Investments and Capital Market, Faculty of Economics and Sociology, University of Lodz, ul. Prez. Gabriela Narutowicza 68, 90-136 Lodz, Poland)

  • Piotr Pietraszewski

    (Department of Investments and Capital Market, Faculty of Economics and Sociology, University of Lodz, ul. Prez. Gabriela Narutowicza 68, 90-136 Lodz, Poland)

  • Rafał Wolski

    (Department of Investments and Capital Market, Faculty of Economics and Sociology, University of Lodz, ul. Prez. Gabriela Narutowicza 68, 90-136 Lodz, Poland)

Abstract

The article discusses the ability of potential growth measures calculated basing on market share prices to predict the future growth of the companies listed on the primary and alternative exchange markets in Poland. Analysing the Polish exchange market and dividing the sample of companies due to the markets they are listed – the Warsaw Stock Exchange Main Market or the NewConnect Alternative Market – brought conclusive results. Company growth measured as the growth of total assets, equity, sales and, what is the most important, earnings per share, is related to the growth opportunity measures and other factors taken into account in the tested models. The differences between the results for the two separate markets are evident and the relationship between growth opportunity measures and the future growth seems to be stronger for larger companies listed on the main market, while the NewConnect smaller companies’ growth is less predictable. We add to the theory of the growth prediction a modified approach by sampling companies according to the exchange they are listed that helps to solve the companies’ “growth puzzle” and supplement the growth theory in the field of factors affecting this process in different growth stages. The originality of the paper is reflected in the modified approach to the problem and distinguishing the stages of development of the company taking into account the Polish stock market.

Suggested Citation

  • Monika Bolek & Piotr Pietraszewski & Rafał Wolski, 2021. "Companies' growth vs. growth opportunity: Evidence from the regular and alternative stock markets in Poland," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 71(2), pages 279-307, June.
    • Handle: RePEc:aka:aoecon:v:71:y:2021:i:2:p:279-307
    DOI: 10.1556/032.2021.00014
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    Cited by:

    1. Piotr Pietraszewski & Agata Gniadkowska-Szymańska & Monika Bolek, 2023. "Expected vs. real growth of companies listed on the London Stock Exchange," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 47(3), pages 646-668, September.

    More about this item

    Keywords

    company growth; growth opportunity; earnings; value; Poland;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

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