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    Oil Sector Spillover Effects to the Kuwait Stock Market in the Context of Uncertainty

    Abdulrazzaq, Yousef M. and Morales, Lucia and Coughlan, Joseph (2019) Oil Sector Spillover Effects to the Kuwait Stock Market in the Context of Uncertainty. Economics, Management, and Financial Markets, 14 (1). pp. 21-37. ISSN 1842-3191

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    . Three major events associated with significant levels of market uncertainty – the Iraq invasion, the global financial crisis, and the Arab Spring revolution – are studied in this paper with the aim of identifying if there are connections between oil prices and the performance of the Kuwait stock market during these events. The study is supported by the traditional Engle and Granger cointegration test, the Granger causality test and Frequency Domain Causality Analysis. The frequency domain causality analysis brings a dynamic dimension to the study, and facilitates the examination of potential relationships between oil prices and the Kuwait stock market over the period under study (1995 to 2016). Interestingly, the research findings did not offer significant evidence on the existence of a long run association between Brent oil prices and Kuwait’s major stock price index. Short-run dynamics were identified as follows: i) unidirectional causality was found between Brent and the Kuwait stock market, a result was not confirmed during the Arab Spring event; ii) the dynamic causality test revealed a unidirectional relationship from oil to the stock market only during the Iraq invasion. The findings indicate that market players should benefit from monitoring short-run dynamics in the context of the Kuwait Stock Exchange.

    Item Type: Article
    Keywords: Kuwait; stock market; oil prices; market uncertainty; causality;
    Academic Unit: Faculty of Social Sciences > School of Business
    Item ID: 17126
    Identification Number:
    Depositing User: Joseph Coughlan
    Date Deposited: 28 Apr 2023 13:38
    Journal or Publication Title: Economics, Management, and Financial Markets
    Publisher: Addleton Academic Publishers
    Refereed: Yes
    Use Licence: This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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