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Effects of Fluctuations in oil Prıces on G7 Country Stock Exchanges

Author

Listed:
  • Aktolkin Abubakirova

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakhstan)

  • Lyazzat Kudabayeva

    (Taraz Regional University named after M.Kh.Dulaty, Taraz, Kazakhstan)

  • Aizhan Omarova

    (Yessenov University, Aktau, Kazakhstan)

  • Zhanargul Taskinbaikyzy

    (Yessenov University, Aktau, Kazakhstan)

  • Bibigul Saubetova

    (Yessenov University, Aktau, Kazakhstan)

Abstract

The aim of the study is to analyze the effects of changes in oil prices, which have an important place among energy resources, on the stock market indices of G7 countries. Since they can be considered as a barometer of the macroeconomic indicators of the G7 countries, the stock market indices of these countries were included in this study and their impact on the fluctuations in oil prices was examined. G7 countries produce 85% of the world's production and constitute 66% of the world's population. 75% of international trade is carried out by the member countries of this group. The share of these countries in international investment is 80%. In this study, the impact of oil price changes on G7 country stock market indices was investigated with monthly frequency data between January 2010 and December 2023. This effect was tried to be found by applying Granger causality test and cointegration test. According to the findings obtained in this study, it was understood that there was no cointegration and the variables did not balance in the long run. On the other hand, according to the Granger causality test, it was determined that the crude oil price was the cause of the stock markets of G7 countries with a significance of 10%.

Suggested Citation

  • Aktolkin Abubakirova & Lyazzat Kudabayeva & Aizhan Omarova & Zhanargul Taskinbaikyzy & Bibigul Saubetova, 2024. "Effects of Fluctuations in oil Prıces on G7 Country Stock Exchanges," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 324-328, July.
    • Handle: RePEc:eco:journ2:2024-04-29
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    References listed on IDEAS

    as
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    2. Steve Crawford & Garen Markarian & Volkan Muslu & Richard Price, 2021. "Oil prices, earnings, and stock returns," Review of Accounting Studies, Springer, vol. 26(1), pages 218-257, March.
    3. Bai, Shuming & Koong, Kai S., 2018. "Oil prices, stock returns, and exchange rates: Empirical evidence from China and the United States," The North American Journal of Economics and Finance, Elsevier, vol. 44(C), pages 12-33.
    4. Adediran, Ibrahim Opeyemi & Masih, Mansur, 2018. "Oil price and the global conventional and islamic stock markets: Is the relationship symmetric or asymmetric ? evidence from nonlinear ARDL," MPRA Paper 91558, University Library of Munich, Germany.
    5. Aktolkin Abubakirova & Aziza Syzdykova & Assan Dosmakhanbet & Lyazzat Kudabayeva & Gulnar Abdulina, 2021. "Relationship between Oil Prices and Stock Prices in BRICS-T Countries: Symmetric and Asymmetric Causality Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 140-148.
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    More about this item

    Keywords

    Oil Prices; Stock Market Index; G7 Countries; Panel Cointegration; Panel Causality;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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