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Givers never lack: Nigerian oil & gas asymmetric network analyses

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  • Okorie, David Iheke
  • Lin, Boqiang

Abstract

Analyzing the Nigerian oil and gas industry network system from May 5th, 2014 to January 23rd, 2020, this paper presents empirical evidence of the connectedness in a network of the six leading oil and gas companies in Nigeria with the WTI crude oil market. The results show that Forte oil is a safe-haven for the Nigerian oil & gas investment market. The Forte market is the leading giver or transmitter of all the return (overall, good news, and bad news) information spillover in the network; truly, ‘givers never lack!’. Conversely, Total oil and Mobil oil are the net receivers under different network designs. Truly. Under the volatility system network design, Seplat oil is the leading net transmitter of return volatility while the crude oil market is the largest net receiver. Under all the system network designs, the WTI crude oil market is a net receiver of information in the system. This depicts the true producer-trader flow of price information. Both the sensitivity and the robustness analysis confirm the findings from the main network connectedness analysis. Based on these findings, practical investment portfolio management policies are recommended for the Nigerian oil and gas investment market.

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  • Okorie, David Iheke & Lin, Boqiang, 2022. "Givers never lack: Nigerian oil & gas asymmetric network analyses," Energy Economics, Elsevier, vol. 108(C).
    • Handle: RePEc:eee:eneeco:v:108:y:2022:i:c:s0140988322000901
    DOI: 10.1016/j.eneco.2022.105910
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    More about this item

    Keywords

    Crude oil; Return; Asymmetry; Volatility; Connectedness; Information spillover;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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