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How oil prices affect East and Southeast Asian economies: Evidence from financial markets and implications for energy security

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  • Thorbecke, Willem

Abstract

Oil prices have been volatile. To investigate how oil price swings affect Asian economies, this paper examines how they affect industry and aggregate stock returns. Economic theory implies that there is a strong link between a sector's stock return and its economic activity. Evidence presented here indicates that sectors such as airlines, food, and industrial transportation are harmed by oil price increases and that sectors such as oil and gas production and exploration benefit. The findings also reveal that many industries within each country are impacted by oil prices. The paper concludes by offering several suggestions to help Asian economies weather the effects of oil price changes and increase energy security.

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  • Thorbecke, Willem, 2019. "How oil prices affect East and Southeast Asian economies: Evidence from financial markets and implications for energy security," Energy Policy, Elsevier, vol. 128(C), pages 628-638.
    • Handle: RePEc:eee:enepol:v:128:y:2019:i:c:p:628-638
    DOI: 10.1016/j.enpol.2019.01.044
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    Cited by:

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    3. Zhao, Xiaochun & Jiang, Mei & Wu, Zijun & Zhou, Ying, 2023. "Quantitative evaluation of China's energy security policy under the background of intensifying geopolitical conflicts: Based on PMC model," Resources Policy, Elsevier, vol. 85(PA).
    4. Yaghoub Abdi & Xiaoni Li & Xavier Càmara-Turull, 2023. "Firm value in the airline industry: perspectives on the impact of sustainability and Covid-19," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-24, December.
    5. Shu Mo & Ting Wang, 2022. "Synergistic Effects of International Oil Price Fluctuations and Carbon Tax Policies on the Energy–Economy–Environment System in China," IJERPH, MDPI, vol. 19(21), pages 1-17, October.
    6. Michail Nektarios A. & Melas Konstantinos D., 2022. "Geopolitical Risk and the LNG-LPG Trade," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 28(3), pages 243-265, September.
    7. Willem THORBECKE, 2021. "East Asian and European Firms: Comrades or Competitors," Discussion papers 21098, Research Institute of Economy, Trade and Industry (RIETI).
    8. Willem Thorbecke, 2021. "The Exposure of French and South Korean Firm Stock Returns to Exchange Rates and the COVID-19 Pandemic," JRFM, MDPI, vol. 14(4), pages 1-29, April.
    9. Loretta Mastroeni & Alessandro Mazzoccoli & Greta Quaresima & Pierluigi Vellucci, 2021. "Wavelet analysis and energy-based measures for oil-food price relationship as a footprint of financialisation effect," Papers 2104.11891, arXiv.org, revised Mar 2022.
    10. Willem THORBECKE, 2021. "The Semiconductor Industry in the Age of Trade Wars, Covid-19, and Strategic Rivalries," Discussion papers 21064, Research Institute of Economy, Trade and Industry (RIETI).
    11. Balcilar, Mehmet & Demirer, Rıza & Hammoudeh, Shawkat, 2019. "Quantile relationship between oil and stock returns: Evidence from emerging and frontier stock markets," Energy Policy, Elsevier, vol. 134(C).
    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. Casper Boongaling Agaton, 2022. "Will a Geopolitical Conflict Accelerate Energy Transition in Oil-Importing Countries? A Case Study of the Philippines from a Real Options Perspective," Resources, MDPI, vol. 11(6), pages 1-17, June.
    14. Fedorova, E. & Pyltsin, I. & Kovalchuk, Yu. & Drogovoz, P., 2022. "News and social networks of Russian companies: Degree of influence on the securities market," Journal of the New Economic Association, New Economic Association, vol. 53(1), pages 32-52.
    15. Zhu, Mingxue & Zhang, Hua & Xing, Wanli & Zhou, Xuanru & Wang, Lu & Sun, Haoyu, 2023. "Research on price transmission in Chinese mining stock market: Based on industry," Resources Policy, Elsevier, vol. 83(C).
    16. Zhaoyong Sun & Xinyu Cai & Wei-Chiao Huang, 2022. "The Impact of Oil Price Fluctuations on Consumption, Output, and Investment in China’s Industrial Sectors," Energies, MDPI, vol. 15(9), pages 1-19, May.
    17. Willem Thorbecke, 2021. "The weak rupiah: catching the tailwinds and avoiding the shoals," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 23(3), pages 521-539, December.
    18. Tii N. Nchofoung, 2023. "Oil price shocks and energy transition in Africa," Working Papers 23/064, European Xtramile Centre of African Studies (EXCAS).
    19. Mollick, André Varella & Amin, Md Ruhul, 2021. "Occupancy, oil prices, and stock returns: Evidence from the U.S. airline industry," Journal of Air Transport Management, Elsevier, vol. 91(C).
    20. Willem Thorbecke, 2023. "Japanese Economic Performance after the Pandemic: A Sectoral Analysis," JRFM, MDPI, vol. 16(5), pages 1-17, May.
    21. 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.
    22. Willem THORBECKE, 2020. "How the Coronavirus Crisis Affected Japanese Industries: Evidence from the Stock Market," Discussion papers 20061, Research Institute of Economy, Trade and Industry (RIETI).
    23. Trabelsi, Nader & Tiwari, Aviral Kumar & Hammoudeh, Shawkat, 2022. "Spillovers and directional predictability between international energy commodities and their implications for optimal portfolio and hedging," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    24. Willem THORBECKE, 2020. "How the Coronavirus Crisis is Affecting the Korean Economy: Evidence from the Stock Market," Discussion papers 20088, Research Institute of Economy, Trade and Industry (RIETI).
    25. Bertheau, Paul, 2020. "Supplying not electrified islands with 100% renewable energy based micro grids: A geospatial and techno-economic analysis for the Philippines," Energy, Elsevier, vol. 202(C).

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    More about this item

    Keywords

    Crude oil prices; East Asia; Stock returns; Energy security;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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