The Role of Stock Market Development on Economic Growth in OPEC Countries: Does Oil Price Movement Matter? Fresh Evidence from Nigeria

Okere, Kingsley Ikechukwu; Ndubuisi, Paul

doi:10.18488/journal.8.2017.52.194.207

Cited by 8 publications

(3 citation statements)

References 28 publications

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“…Several studies have examined the connections between oil prices and stock market movements in oil-exporting countries. For example, Okere and Ndubuisi (2017) have investigated the effects of oil price shocks on the Nigerian economy. The results reveal that crude prices significantly influence the economy by directly impacting the stock market's performance.…”

Section: Oil Exportersmentioning

confidence: 99%

Reinvestigating the Oil Dependency of the GCC Countries’ Stock Market: A Regime-Switching Cointegration Approach

Ebadi,

Razaq

2024

IJEEP

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This paper investigates the asymmetric impact of oil prices on Gulf Cooperation Council (GCC) stock markets using a regime-switching cointegration approach with data from April 2012 to April 2022. we postulate that investors consider ups and downs in the stock market index instead of price-earnings ratios in their decision-making process. Our results indicate that investors exhibit more optimism during economic upturns, corresponding to positive oil shocks, than pessimism during economic downturns. The study offers several contributions to the literature: (i) Diagnostic tests affirm that constructing the model based on stock market index movements rather than P/E ratios results in superior performance. (ii) As expected for oil-dependent nations, our model attributes more significant deterministic influence to the oil market and closely tracks the stock market. (iii) The results demonstrate that positive oil shocks exert a more pronounced long-term asymmetric influence on GCC stock markets than adverse shocks. (iv) Dynamic multiplier analysis reveals that oil shocks persist longer in Oman, Bahrain, and Qatar's markets than in the UAE, Saudi Arabia, and Kuwait. (v) The stock market in the United Arab Emirates exhibits greater independence from oil price fluctuations, responding modestly, while Qatar and Bahrain markets are more sensitive.

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Section: Oil Exportersmentioning

confidence: 99%

Reinvestigating the Oil Dependency of the GCC Countries’ Stock Market: A Regime-Switching Cointegration Approach

Ebadi,

Razaq

2024

IJEEP

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“…They concluded that financial measures do in fact mitigate the effects of oil price volatility, and the introduction of these measures can reduce or completely eliminate the negative effects of oil price volatility on growth. Okere and Ndubuisi (2017) also investigated the relationship between crude oil price and stock market development and economic growth in Nigeria between 1981 and 2014 using the ARDL model. The study concluded that the dominant role of oil price is one of the engines driving economic growth in Nigeria.…”

Section: Literature Reviewmentioning

confidence: 99%

On the volatility of daily stock returns of Total Nigeria Plc: evidence from GARCH models, value-at-risk and backtesting

2020

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This study investigates the volatility in daily stock returns for Total Nigeria Plc using nine variants of GARCH models: sGARCH, girGARCH, eGARCH, iGARCH, aGARCH, TGARCH, NGARCH, NAGARCH, and AVGARCH along with value at risk estimation and backtesting. We use daily data for Total Nigeria Plc returns for the period January 2, 2001 to May 8, 2017, and conclude that eGARCH and sGARCH perform better for normal innovations while NGARCH performs better for student t innovations. This investigation of the volatility, VaR, and backtesting of the daily stock price of Total Nigeria Plc is important as most previous studies covering the Nigerian stock market have not paid much attention to the application of backtesting as a primary approach. We found from the results of the estimations that the persistence of the GARCH models are stable except for few cases for which iGARCH and eGARCH were unstable. Additionally, for student t innovation, the sGARCH and girGARCH models failed to converge; the mean reverting number of days for returns differed from model to model. From the analysis of VaR and its backtesting, this study recommends shareholders and investors continue their business with Total Nigeria Plc because possible losses may be overcome in the future by improvements in stock prices. Furthermore, risk was reflected by significant up and down movement in the stock price at a 99% confidence level, suggesting that high risk brings a high return.

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“…This motivated me to offer a recent and a comprehensive study. Generally speaking, studies forwarded towards the relationship between financial development and economic expansion, concluded that, this correlation is different in comparison with developed economies because of the dominance of the oil sector on economic activities (Samargandi et al, 2014;Quixina & Almeida, 2014;Bakwena & Bodmanm, 2011;Cevik & Rahmani, 2013;Nwani et al, 2016;Okene & Ndubuisi, 2017;Nwamuo, 2018). This work introduces the need to present a recent study that considers the main factors of capital market which expected to affect economic growth.…”

Section: Introductionmentioning

confidence: 99%

Capital Market Development and Economic Growth: An Ardl Approach for Saudi Arabia, 1985–2018

Algaeed

2020

Journal of Business Economics and Management

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The aim of this paper is to analyze and test the effects of capital market development on the per-capita GDP growth in Saudi Arabian economy covering the period of 1985-2018. An ARDL, FMOLS and Johansen tests are implemented. The stock market indicators: share price index, capitalization, liquidity, number of share transactions, and number of shares are employed using a log-linear eclectic model designed to fit the availability of data. Capitalization and liquidity came up with negative signs, contrary to the findings of lots of studies in economic literature. However, the share price index, number of shares traded, and the ratio of number of share transactions had the right signs as expected a priori. The findings raise serious questions about the size of the market, the steps and efforts that have been taken to deepen the capital market and their consequences on the function and potency of capital market in fostering per-capita GDP growth. Applying Granger causality test, share price index, market capitalization and number of shares traded do not granger cause per-capita GDP. They are significant at 5 percent level. Capital market authority (CMA) should draw a road map to accelerate deepening the capital market in order to serve economic growth.

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The Role of Stock Market Development on Economic Growth in OPEC Countries: Does Oil Price Movement Matter? Fresh Evidence from Nigeria

Cited by 8 publications

References 28 publications

Reinvestigating the Oil Dependency of the GCC Countries’ Stock Market: A Regime-Switching Cointegration Approach

Reinvestigating the Oil Dependency of the GCC Countries’ Stock Market: A Regime-Switching Cointegration Approach

On the volatility of daily stock returns of Total Nigeria Plc: evidence from GARCH models, value-at-risk and backtesting

Capital Market Development and Economic Growth: An Ardl Approach for Saudi Arabia, 1985–2018

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