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Oil Price Fluctuations and Industry Stock Return

Reza Tahmoorespour, Marjan Rezvani, Meysam Safari () and Elias Randjbarand
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Reza Tahmoorespour: Graduate School of Management (GSM), Universiti Putra Malaysia, Malaysia
Marjan Rezvani: Graduate School of Management (GSM), Universiti Putra Malaysia, Malaysia
Elias Randjbarand: Aerospace Manufacturing Research Centre (AMRC), Faculty of Engineering, Selangor, Malaysia

Bulletin of Energy Economics (BEE), 2015, vol. 3, issue 3, 119-145

Abstract: This study investigates the impact of oil price variation on 14 industries in six markets, including Canada, China, France, India, the United Kingdom, and the United States. Panel weekly data were collected from June 1998 to December 2011. The results indicate that price fluctuations primarily affect the Oil and Gas as well as the Mining industries and have the least influence on the Food and Beverage industry. Furthermore, in three out of six of these countries (Canada, France, and the U.K.), oil price changes negatively affect the Pharmaceutical and Biotechnology industry. One possible reason for the negative relationship between oil price changes and the Pharmaceutical and Biotechnology industries in the above-mentioned countries is that the governments of these countries fund their healthcare systems. Portfolio managers and investors will find the results of this study useful because it enables adjusting portfolios based on knowledge of the industries that are impacted the most or the least by oil price fluctuations.

Keywords: Oil Prices; Stock Returns (search for similar items in EconPapers)
JEL-codes: E44 F3 (search for similar items in EconPapers)
Date: 2015
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