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

Author

Listed:
  • Chinwe Okoyeuzu

    (University of Nigeria, Enugu Campus, Nigeria)

  • Imaobong Judith Nnam

    (University of Nigeria, Enugu Campus, Nigeria)

  • Wilfred Ukpere

    (University of Johannesburg, South Africa)

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.

Suggested Citation

  • Chinwe Okoyeuzu & Imaobong Judith Nnam & Wilfred Ukpere, 2023. "The Nexus between Oil Price and Stock Returns from a Global Economic Perspective," Review of Applied Socio-Economic Research, Pro Global Science Association, vol. 26(1), pages 109-119, December.
    • Handle: RePEc:rse:wpaper:v:26:y:2023:i:2:p:109-119
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    More about this item

    Keywords

    Brent oil price; Stock returns; ARDL; Developing economy; External shocks.;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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