Recent Evidence on the Oil Price Shocks on Gulf Cooperation Council Stock Markets

Document Type

Article

Source of Publication

International Journal of the Economics of Business

Publication Date

5-4-2018

Abstract

© 2017, © 2017 International Journal of the Economics of Business. The recent plunge in the price of oil affected many countries, especially major oil producers and exporters, such as the Gulf Cooperation Council (GCC), which accounts for half of the global oil reserves. This paper examines the impact of oil price changes on GCC stock markets, including Bahrain, Kuwait, Oman, Qatar, Kingdom of Saudi Arabia, and United Arab Emirates over a 10-year period, 2005–2015. We examine the direction of influence and influence absorption through Granger causality and impulse response function. The results are important for portfolio management at the international level, and provide insights for government and regulatory authorities in times of oil price change. Additionally, the evidence suggests the need for more economic diversification at the country level in the GCC region to mitigate high volatility in the event of oil shocks.

ISSN

1357-1516

Publisher

Routledge

Volume

25

Issue

2

First Page

297

Last Page

312

Disciplines

Business

Keywords

GCC Countries, Granger Causality, Impulse Response Functions, Oil Prices, Stock Market Volatility, Stock Markets

Scopus ID

85034642212

Indexed in Scopus

yes

Open Access

no

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