Scholarly record

POTENTIAL LANDSCAPE OF LATVIAN REGISTERED COMPANIES RELATIVE TO BALTIC AND NORDIC STOCK MARKET LISTED COMPANIES

Aija Pilvere, Irina Pilvere, Baiba Rivža

Abstract

Stock market in Latvia necessitates to be increased in size to attract more investors and encourage economic development. The opportunity for stock market’s enhancement are registered companies in Latvia. What is the landscape of Latvian registered companies and weather, there are enough companies with financial profile having potential for stock market listing, that is the question to be assessed by the authors, comparing those companies’ financial profile to the average Baltic States and Nordic countries stock market listed companies’ financial profile. This type of analysis is novel and has not been broadly analyzed in the Baltic States. Authors used the evaluation of registered companies in Latvia financial profile mean and median indicators and compared those to the profile of average Baltic and Nordic countries stock market listed company profile, which was obtained by using cluster analysis on the absolute and relative financial indicator basis. Performed analysis revealed that Nordic countries average listed company indicators are beyond the reach of Baltic States stock market listed companies’ and Latvia registered companies’ indicators. However, only the average profile of large size Latvian registered companies resembles average Baltic States listed companies’ financial profile, especially based on relative indicators. As total number of Latvian large size companies are relatively small, it is useful to promote and enhance medium-size companies’ development and thus, Latvian stock market could have a broader pool where to source and motivate registered companies for listing on the Riga Stock exchange, to provide benefits to both listed companies and the overall economy.

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