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Stock market reactions to different types of oil shocks: Evidence from China

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  • Jin Boon Wong

Abstract

This study utilizes a novel method of isolating oil‐price shocks into demand and supply driven contributors to analyze their impacts on stock returns in China. Empirical results suggest that oil shocks related to supply limitations generate positive abnormal stock returns for industries that can help alleviate these constraints. Conversely, demand‐driven oil shocks have mixed effects on industries which may relate to the uncertain impact of increasing demand for goods and higher production costs. These results are robust to alternative specifications of country‐specific control factors and provide evidence that different types of oil shocks have distinctive impacts on industries.

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  • Jin Boon Wong, 2021. "Stock market reactions to different types of oil shocks: Evidence from China," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 41(2), pages 179-193, February.
    • Handle: RePEc:wly:jfutmk:v:41:y:2021:i:2:p:179-193
    DOI: 10.1002/fut.22176
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    Cited by:

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    3. Qin Zhang & Jin Boon Wong, 2023. "The influence of oil price uncertainty on stock liquidity," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 43(2), pages 141-167, February.
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    5. Naeem, Muhammad Abubakr & Pham, Linh & Senthilkumar, Arunachalam & Karim, Sitara, 2022. "Oil shocks and BRIC markets: Evidence from extreme quantile approach," Energy Economics, Elsevier, vol. 108(C).
    6. Hasan, Mostafa Monzur & Wong, Jin Boon & Al Mamun, Mohammed Abdullah, 2022. "Oil shocks and corporate social responsibility," Energy Economics, Elsevier, vol. 107(C).
    7. Wong, Jin Boon & Zhang, Qin, 2022. "Impact of carbon tax on electricity prices and behaviour," Finance Research Letters, Elsevier, vol. 44(C).
    8. Wong, Jin Boon & Hasan, Mostafa Monzur, 2021. "Oil shocks and corporate payouts," Energy Economics, Elsevier, vol. 99(C).
    9. Sierk Horn & Tomoki Sekiguchi & Matthias Weiss, 2021. "Thrown off track? Adjustments of Asian business to shock events," Asian Business & Management, Palgrave Macmillan, vol. 20(4), pages 435-455, September.
    10. Hasan, Mostafa Monzur & Asad, Suzona & Wong, Jin Boon, 2022. "Oil price uncertainty and corporate debt maturity structure," Finance Research Letters, Elsevier, vol. 46(PA).
    11. Zhang, Qin & Wong, Jin Boon, 2022. "ESG reputational risks and board monitoring committees," Finance Research Letters, Elsevier, vol. 50(C).
    12. Hossain, Ashrafee T. & Masum, Abdullah-Al, 2022. "Does corporate social responsibility help mitigate firm-level climate change risk?," Finance Research Letters, Elsevier, vol. 47(PB).
    13. Prodromou, Tina & Demirer, Riza, 2022. "Oil price shocks and cost of capital: Does market liquidity play a role?," Energy Economics, Elsevier, vol. 115(C).
    14. Wong, Jin Boon & Zhang, Qin, 2024. "ESG reputation risks, cash holdings, and payout policies," Finance Research Letters, Elsevier, vol. 59(C).
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    16. Wong, Jin Boon & Zhang, Qin, 2023. "Managerial performance and oil price shocks," Energy Economics, Elsevier, vol. 124(C).
    17. Qin Zhang & Jin Boon Wong, 2022. "Do oil shocks impact stock liquidity?," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 42(3), pages 472-491, March.

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