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Oil Price Fluctuations and Industry Stock Return

Author

Listed:
  • Reza Tahmoorespour

    (Graduate School of Management (GSM), Universiti Putra Malaysia, Malaysia)

  • Marjan Rezvani

    (Graduate School of Management (GSM), Universiti Putra Malaysia, Malaysia)

  • Meysam Safari

    (Graduate School of Management (GSM), Universiti Putra Malaysia, Malaysia)

  • Elias Randjbarand

    (Aerospace Manufacturing Research Centre (AMRC), Faculty of Engineering, Selangor, Malaysia)

Abstract

This study investigates the impact of oil price variation on 14 industries in six markets, including Canada, China, France, India, the United Kingdom, and the United States. Panel weekly data were collected from June 1998 to December 2011. The results indicate that price fluctuations primarily affect the Oil and Gas as well as the Mining industries and have the least influence on the Food and Beverage industry. Furthermore, in three out of six of these countries (Canada, France, and the U.K.), oil price changes negatively affect the Pharmaceutical and Biotechnology industry. One possible reason for the negative relationship between oil price changes and the Pharmaceutical and Biotechnology industries in the above-mentioned countries is that the governments of these countries fund their healthcare systems. Portfolio managers and investors will find the results of this study useful because it enables adjusting portfolios based on knowledge of the industries that are impacted the most or the least by oil price fluctuations.

Suggested Citation

  • Reza Tahmoorespour & Marjan Rezvani & Meysam Safari & Elias Randjbarand, 2015. "Oil Price Fluctuations and Industry Stock Return," Bulletin of Energy Economics (BEE), The Economics and Social Development Organization (TESDO), vol. 3(3), pages 119-145, September.
  • Handle: RePEc:ijr:beejor:v:3:y:2015:i:3:p:119-145
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    Citations

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    Cited by:

    1. Muhammad Usman & Danish Ahmed Siddiqui, 2019. "The Effect of Oil Price on Stock Market Returns with Moderating Effect of Foreign Direct Investment & Foreign Portfolio Investment: Evidence from Pakistan Stock Market," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 7(2), pages 45-61, June.
    2. Nurkhodzha Akbulaev & Etimad Rahimli, 2020. "Statistical Analysis of the Relationship between Oil Prices and Industry Index Prices," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 324-331.

    More about this item

    Keywords

    Oil Prices; Stock Returns;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F3 - International Economics - - International Finance

    Statistics

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