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Oil prices, stock markets and firm performance: Evidence from Europe

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  • Bagirov, Miramir
  • Mateus, Cesario

Abstract

This paper extends understanding of the relationship between oil prices, stock markets and financial performance of oil and gas firms over the past decade. Firstly, it studies the impact of oil price fluctuations on stock markets in Europe. Secondly, it examines volatility spill-overs between oil and European stock markets. As oil price changes do not equally affect all industries, the study conducts both market-level and sector-level analyses. Thirdly, it examines the impact of crude oil price changes on the financial performance measure of oil and gas firms, both listed and unlisted, from the Western European region.

Suggested Citation

  • Bagirov, Miramir & Mateus, Cesario, 2019. "Oil prices, stock markets and firm performance: Evidence from Europe," International Review of Economics & Finance, Elsevier, vol. 61(C), pages 270-288.
    • Handle: RePEc:eee:reveco:v:61:y:2019:i:c:p:270-288
    DOI: 10.1016/j.iref.2019.02.007
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    Cited by:

    1. Alex Borodin & Natalia Natocheeva & Irina Khominich & Andrey Kulikov & Natalia Shchegolevatykh, 2021. "The Impact of the Business Environment on the Effectiveness of the Implementation of the Financial Strategy of the Oil and Gas Company," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 13-21.
    2. Aastvedt, Tonje Marthinsen & Behmiri, Niaz Bashiri & Lu, Li, 2021. "Does green innovation damage financial performance of oil and gas companies?," Resources Policy, Elsevier, vol. 73(C).
    3. Killins, Robert N. & Mollick, Andre V., 2020. "Performance of Canadian banks and oil price movements," Research in International Business and Finance, Elsevier, vol. 54(C).
    4. Louis Daumas, 2021. "Should we fear transition risks - A review of the applied literature," Working Papers 2021.05, FAERE - French Association of Environmental and Resource Economists.
    5. Shao, Liuguo & Zhang, Hua & Chen, Jinyu & Zhu, Xuehong, 2021. "Effect of oil price uncertainty on clean energy metal stocks in China: Evidence from a nonparametric causality-in-quantiles approach," International Review of Economics & Finance, Elsevier, vol. 73(C), pages 407-419.
    6. Alex Borodin & Galina Panaedova & Svetlana Frumina & Aidyn Kairbekuly & Natalia Shchegolevatykh, 2021. "Modeling the Business Environment of an Energy Holding in the Formation of a Financial Strategy," Energies, MDPI, vol. 14(23), pages 1-18, December.
    7. Henry Okodua & Ese Urhie & Moses Akpesiri Erhi & Christiana Onyohu Hassan & Eyitemi Ayomikun Fasanu, 2022. "Oil Price Volatility and Equity Valuation of Listed Energy Companies in Nigeria: A Panel ARDL Model," International Journal of Energy Economics and Policy, Econjournals, vol. 12(5), pages 482-490, September.
    8. Alexandra Horobet & Georgiana Vrinceanu & Consuela Popescu & Lucian Belascu, 2019. "Oil Price and Stock Prices of EU Financial Companies: Evidence from Panel Data Modeling," Energies, MDPI, vol. 12(21), pages 1-17, October.
    9. Anggraini Dewi & Phonwattana Somsathid & Sudawan Somjai & Erlane K. Ghani & Zulfikar Bagus Pambuko, 2019. "Stock Market Trends and Oil Prices: Evidence from a Developing Country," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 13(3), September.
    10. Ozili, Peterson K, 2023. "Implications of fuel subsidy removal on the Nigerian economy," MPRA Paper 118798, University Library of Munich, Germany.
    11. Nguyen, Thu Thuy & Tran, T.N. & Nguyen, V.C., 2020. "Oil price shocks against stock return of oil- and gas-related firms in the economic depression: A new evidence from a copula approach," OSF Preprints 4cm7b, Center for Open Science.
    12. Daniel Ştefan Armeanu & Camelia Cătălina Joldeş & Ştefan Cristian Gherghina, 2019. "On the Linkage between the Energy Market and Stock Returns: Evidence from Romania," Energies, MDPI, vol. 12(8), pages 1-21, April.
    13. Radosław Puka & Bartosz Łamasz, 2020. "Using Artificial Neural Networks to Find Buy Signals for WTI Crude Oil Call Options," Energies, MDPI, vol. 13(17), pages 1-20, August.
    14. Yujing Gong & Cheng Yan & Kung‐Cheng Ho, 2021. "The effect of managerial ability on corporate social responsibility and firm value in the energy industry," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 581-594, March.
    15. Sourav Batabyal & Robert Killins, 2021. "The Influence of Oil Prices on Equity Returns of Canadian Energy Firms," JRFM, MDPI, vol. 14(5), pages 1-16, May.
    16. Alex Borodin & Irina Mityushina & Mustafa Harputlu & Natalia Kiseleva & Andrey Kulikov, 2023. "Factor Analysis of the Efficiency of Russian Oil and Gas Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 172-188, January.
    17. Gu, Fu & Wang, Jiqiang & Guo, Jianfeng & Fan, Ying, 2020. "Dynamic linkages between international oil price, plastic stock index and recycle plastic markets in China," International Review of Economics & Finance, Elsevier, vol. 68(C), pages 167-179.
    18. Adekunle, Wasiu & Bagudo, Abubakar M. & Odumosu, Monsuru & Inuolaji, Suraj B., 2020. "Predicting stock returns using crude oil prices: A firm level analysis of Nigeria's oil and gas sector," Resources Policy, Elsevier, vol. 68(C).
    19. Sudipta Das, 2021. "The Time–Frequency Relationship between Oil Price, Stock Returns and Exchange Rate," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 17(2), pages 129-149, November.
    20. Aleksandra Leschinskaya & Oksana Kirillova & Maksim Palyanov, 2023. "Assessment of the Formation of the Economic Effect of Cross-Subsidization in the Electric Power Industry," Energies, MDPI, vol. 16(16), pages 1-13, August.
    21. Hung, Ngo Thai & Vo, Xuan Vinh, 2021. "Directional spillover effects and time-frequency nexus between oil, gold and stock markets: Evidence from pre and during COVID-19 outbreak," International Review of Financial Analysis, Elsevier, vol. 76(C).
    22. Adekoya, Oluwasegun B. & Ogunbowale, Gideon O. & Akinseye, Ademola B. & Oduyemi, Gabriel O., 2021. "Improving the predictability of stock returns with global financial cycle and oil price in oil-exporting African countries," International Economics, Elsevier, vol. 168(C), pages 166-181.
    23. Zeinedini, Sh & Karimi, M. Sh & Khanzadi, A., 2022. "Impact of global oil and gold prices on the Iran stock market returns during the Covid-19 pandemic using the quantile regression approach," Resources Policy, Elsevier, vol. 76(C).

    More about this item

    Keywords

    Oil prices; Stock market returns; Oil and gas firms; Firm performance;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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