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VOL. 12, ISSUE 1 (2026)
Stock market performance and economic expansion: A cross-country analysis of India, Japan, and France (2000–2025)
Authors
Dr. Amit Mishra, Adarsh Mishra, Shivam Dubey, Dr. Shraddha Verma
Abstract
This paper examines the dynamic relationship
between the valuation of the Indian stock market, measured by the Market
Capitalization to Gross Domestic Product (Market Cap/GDP) ratio, and the
nation’s economic growth, represented by annual GDP growth. The Market Cap/GDP
ratio, often termed the “Buffett Indicator,” serves as a benchmark for
assessing whether markets are over- or undervalued relative to economic size.
Using annual time-series data from 2000 to 2025, sourced from the World Bank
and supplemented with CEIC Data and IMF projections, the study applies
correlation analysis, linear regression, ARIMA forecasting, and visual
inspection of time-series and scatter plots. Results reveal a weak positive
correlation (r = 0.2377 for 2000–2024, updated to r = 0.2451 for 2000–2025),
indicating limited short-term predictive power. Key divergences include the
2007 market peak, the 2020 contraction, and the 2025 surge amid moderated
growth expectations. Forecasts suggest a Market Cap/GDP ratio of 119.73% and
GDP growth of 6.27% for 2025, though actual estimates are higher at 136% and
6.6%. Comparative analysis with Japan and France highlights contrasting
dynamics: Japan’s elevated ratios (~197% in 2025) with stagnant growth (~0.9%),
and France’s moderate valuations (~100–124%) with subdued growth.
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Pages:37-43
How to cite this article:
Dr. Amit Mishra, Adarsh Mishra, Shivam Dubey, Dr. Shraddha Verma "Stock market performance and economic expansion: A cross-country analysis of India, Japan, and France (2000–2025)". International Journal of Commerce and Management Research, Vol 12, Issue 1, 2026, Pages 37-43
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