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In this paper, we investigate the volatility spillovers between equity market indexes for Islamic and non-Islamic emerging countries. To do so, we implement a combination of a vector autoregressive (VAR) and a multivariate GARCH models under BEKK specification (VAR-BEKK-MGARCH) models with constant conditional correlation (CCC) and dynamic conditional correlations (DCC) for daily equity returns of six markets, namely Turkey, Indonesia, Egypt, Mexico, China and Brazil. Our findings disclose strong volatility spillovers among the Islamic and the non-Islamic country' market returns. The volatility spillovers are time varying and are affected by the occurrence of recent financial crises. Furthermore, we extent the volatility spillovers analysis by providing some financial implications in terms of optimal portfolio' allocations and hedging effectiveness. Specifically, we estimate the optimal weights for a minimum risk multi-country portfolios, we compute the hedge ratio and we assess the hedging strategies' effectiveness. Our findings provide prominent implications for policy makers and portfolio managers in terms of the stability of the financial systems, asset allocation decisions and designing portfolio hedging strategies.

This paper presents our investigation of the impact of economic diversification on economic growth in Saudi Arabia for the 1990-2018 period. To this end, we used linear and nonlinear error-correction models (i.e., the ARDL, Pesaran et al. (2001), and NARDL, Shin et al. (2014), models) that are suited to capture the symmetric and asymmetric effects of economic diversification on economic growth based on the Solow model. As a measure of economic diversification, we used the Herfindahl index. In the linear and the nonlinear specifications, our results show that, economic diversification has a positive effect on the economic growth only in the long term. Furthermore, using the Wald test, the symmetric hypothesis in this relationship is not rejected, indicating that economic growth responds symmetrically to positive and negative changes in economic diversification. Our results also reveal that Saudi Arabia had relative success in achieving its goal of attaining a degree of economic diversification and enhancing its economic growth.

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