Economic policy uncertainty and stock market performance: evidence from the Middle East

Muhammadriyaj Faniband and Salim Shamsher

International Journal of Diplomacy and Economy, 2024, vol. 10, issue 1, 5-38

Abstract: This paper examines the impact of Economic Policy Uncertainty (EPU) in the top 15 economies on the stock market of 9 Middle East countries using a monthly data set from January 2004 to May 2021. The results based on the quantile regression approach show that EPU in China and Spain has a substantial impact on Turkey, EPU in India on UAE, and EPU in Spain and UK on Bahrain and Cyprus across all the quantiles. The other set of results indicate a mixed impact on Middle East countries. The impact of EPU is heterogeneous across stock markets in the Middle East. The results derived from our study would be of substantial utility for multiple stakeholders namely investors, portfolio managers and policy makers for the adoption of efficient decisions and to make better asset allocation.

Keywords: economic policy uncertainty; stock market; Middle East; quantile regression; emerging markets. (search for similar items in EconPapers)
Date: 2024
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