 Crude oil price shocks and idiosyncratic risk: Implications for business groupsNitya Nand Tripathi, Aviral Kumar Tiwari and Chi-Chuan Lee Journal of Asian Economics, 2025, vol. 100, issue C Abstract: The existing literature indicates that movement and volatility in crude oil prices significantly influence macroeconomic stability, industrial dynamics, and firm-level activities. Nevertheless, there is limited research investigating how crude oil price risk affects firms' idiosyncratic risk. This research analyses differences in behavior between business group (BG) firms and stand-alone firms by exploring the relationships among crude oil price fluctuations and volatility, stock market downturns, and firms' idiosyncratic risk. The findings indicate a positive association between crude oil price fluctuations and volatility and firms' idiosyncratic risk. Compared to stand-alone firms, BG firms exhibit lower idiosyncratic risk, reflecting a risk-buffering effect.. Lastly, this research further investigates how market sentiment responds to unfavorable market conditions. The analysis indicates that corporations and investors become risk-averse when facing simultaneous stock market downturns and rising crude oil prices. Keywords: Oil price fluctuations; Volatility; Idiosyncratic risk; Business group; Emerging markets (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:100:y:2025:i:c:s1049007825001319 DOI: 10.1016/j.asieco.2025.102007 Access Statistics for this article Journal of Asian Economics is currently edited by C. Wiemer More articles in Journal of Asian Economics from Elsevier |
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