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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.

Suggested Citation

  • 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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    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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