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The Gulfization of Stock Markets:Evidence on Regional Spillovers from GCC to MENA, Asia, and Africa

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  • Saito,Jun

Abstract

This study analyzes stock market “Gulfization,” whereby spillovers from the Gulf Cooperation Council affect equity markets in capital-receiving countries. Using weekly data from 2000–2023, we estimate pairwise VAR models and construct a spillover index based on cumulative impulse responses, which is linked to foreign direct investment, remittances, and trade. Spillovers are strongest in MENA—particularly Egypt, Jordan, and Palestine—moderate in parts of Asia, and weak in Africa. Correlation results show that remittances and trade, rather than FDI, explain spillovers. We conclude that Gulfization reflects a structural form of regional financial interdependence.

Suggested Citation

  • Saito,Jun, 2025. "The Gulfization of Stock Markets:Evidence on Regional Spillovers from GCC to MENA, Asia, and Africa," IDE Discussion Papers 983, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper983
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    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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