The Gulfization of Stock Markets:Evidence on Regional Spillovers from GCC to MENA, Asia, and Africa

Jun Saito

No 983, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This study analyzes stock market “Gulfization,” whereby spillovers from the Gulf Cooperation Council affect equity markets in capital-receiving countries. Using weekly data from 2000–2023, we estimate pairwise VAR models and construct a spillover index based on cumulative impulse responses, which is linked to foreign direct investment, remittances, and trade. Spillovers are strongest in MENA—particularly Egypt, Jordan, and Palestine—moderate in parts of Asia, and weak in Africa. Correlation results show that remittances and trade, rather than FDI, explain spillovers. We conclude that Gulfization reflects a structural form of regional financial interdependence.

Keywords: Gulfization|GCC; countries|stock; market; spillover; effects|economic; ties|emerging; markets|capital; flows|financial; integration (search for similar items in EconPapers)
JEL-codes: F21 F24 F36 G15 O16 (search for similar items in EconPapers)
Date: 2025-12
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Published in IDE Discussion Paper = IDE Discussion Paper, No.983. 2025-12

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