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The nexus between global oil prices and Islamic and conventional stock markets in the developed and developing countries

Author

Listed:
  • Tuğba KAYHAN

    (Yeditepe University, Istanbul, Turkey)

  • Mustafa UYSAL

    (Artvin Coruh University, Turkey)

Abstract

This study examines the co-movement of coherence between global oil prices, and Islamic and conventional stock markets which has noteworthy substance for faith-oriented investors and participants in oil market for developed and developing countries between the period May:2002 and November:2019. To achieve the objective of this study, Pedroni cointegration test and Dumitrescu- Hurlin causality tests are implemented. The results show us that there is a long-term relationship between the global oil prices and Islamic stock market of developed and developing countries. On the other hand, the cointegration relationship between conventional stock markets and oil prices has been realized only for developing countries. No such relationship has been found for developed countries. In addition, the causality relationship has been reached for the conventional and Islamic stock markets of both country groups with oil prices. This study will be an alternative investment avenue for investors, portfolio and risk managers; they will use for setting the portfolio diversity. In addition, this study will enlighten the portfolio and fund managers, policy makers and investors who examine the relationship between the global oil prices, and Islamic and conventional stock indices for developed and developing countries’ stock markets.

Suggested Citation

  • Tuğba KAYHAN & Mustafa UYSAL, 2022. "The nexus between global oil prices and Islamic and conventional stock markets in the developed and developing countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(633), W), pages 21-40, Winter.
    • Handle: RePEc:agr:journl:v:4(633):y:2022:i:4(633):p:21-40
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