The Effects of Commodity Discoveries on Small Open Economies: Empirical Evidence from the Falkland Islands

Bruce Morley

Economies, 2019, vol. 7, issue 4, 1-10

Abstract: The aim of this study is to determine the effects of discovering oil on the performance of a small open economy, in this case the Falkland Islands. Using an event study approach and the return on one of the Falkland Islands’ main companies, the results suggest that the discovery of oil has mostly had a positive effect on this company, which serves as a proxy for the Falkland Islands economy. In addition, using an EGARCH approach, there is evidence that the discovery of oil has reduced the volatility or risk of the company and therefore potentially the economy as a whole. However, when the oil price is added to the model, this tends to dominate the effect of the discovery.

Keywords: oil discovery; stock price; risk; event study; Q32; Q42 (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2227-7099/7/4/106/pdf (application/pdf)
https://www.mdpi.com/2227-7099/7/4/106/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:7:y:2019:i:4:p:106-:d:279428

Access Statistics for this article

Economies is currently edited by Ms. Adore Zhou

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().