The Nexus between Oil Price and Stock Returns from a Global Economic Perspective

Chinwe Okoyeuzu, Imaobong Judith Nnam and Wilfred Ukpere
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Chinwe Okoyeuzu: University of Nigeria, Enugu Campus, Nigeria
Imaobong Judith Nnam: University of Nigeria, Enugu Campus, Nigeria
Wilfred Ukpere: University of Johannesburg, South Africa

Review of Applied Socio-Economic Research, 2023, vol. 26, issue 1, 109-119

Abstract: The connection between oil price and stock returns in a developing economy was analyzed in the current study. Given the regular market turbulence that causes investors to lose money, it is unquestionably important to investigate the link between prices of oil and stock returns in line with recent series. We demonstrate that the two variables (Price of oil and stock returns) have a short-run linear association using the Autoregressive Distributed Lag (ARDL) estimation technique. Overall, our finding emphasized the relevance of oil price in driving stocks returns, which ultimately adds to the discourse of oil price and stock market literature, by recognizing the worldwide nature of oil and financial markets. Investors and other players in the financial market could benefit from the findings of this study.

Keywords: Brent oil price; Stock returns; ARDL; Developing economy; External shocks. (search for similar items in EconPapers)
JEL-codes: G1 G13 G17 (search for similar items in EconPapers)
Date: 2023
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