Sectoral Contributions to Financial Market Resilience: Evidence from GCC Countries

Khaled O. Alotaibi (), Mohammed A. Al-Shurafa, Meshari Al-Daihani and Mohamed Bouteraa
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Khaled O. Alotaibi: College of Business Studies, The Public Authority for Applied Education and Training (PAAET), Al-Ardhiya 92400, Kuwait
Mohammed A. Al-Shurafa: Osol for Shariah Advisory and Audit Consultations, Safat, Kuwait City 13092, Kuwait
Meshari Al-Daihani: Academy of Islamic Studies, Universiti Malaya, Kuala Lumpur 50603, Malaysia
Mohamed Bouteraa: College of Business, American University of Qatar, Qatar Foundation, Education City, Doha P.O. Box 5825, Qatar

JRFM, 2025, vol. 18, issue 8, 1-20

Abstract: This study investigates the contributions of five key sectors—insurance, materials, utilities, real estate, and transport—to the financial markets of six Gulf Cooperation Council (GCC) countries from 2004 to 2023. Grounded in the Sectoral Linkage Theory and Endogenous Growth Theory, the study employs a Panel Autoregressive Distributed Lag (Panel ARDL) model to examine both short-term and long-term sectoral impacts on financial market resilience. The findings reveal that the insurance and transport sectors offer short-term market stimulation, but lack persistent effects. Conversely, the materials, utilities, and real estate sectors exhibit strong, long-run contributions to financial stability and economic diversification. These results highlight the asymmetric impact of sectoral dynamics on market performance in resource-rich contexts. This research contributes to the literature by providing empirical evidence on sectoral interdependence in oil-dependent economies and highlights the importance of structural diversification for sustainable financial resilience. The study provides actionable insights for policymakers and investors seeking to enhance market resilience and reduce reliance on hydrocarbon revenues through targeted sectoral development.

Keywords: GCC; financial markets; sectoral linkages; economic diversification; resilience; Panel ARDL (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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