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The Impact of European Uncertainty on the Gulf Cooperation Council Markets

Author

Listed:
  • Alqahtani Abdullah Saeed S

    (School of Economics, HuazhongUniversity of Science and Technology, Luoyu Road, Wuhan, China.)

  • Ouyang Hongbing

    (School of Economics, HuazhongUniversity of Science and Technology, Luoyu Road, Wuhan, China.)

  • Ali Adam

    (School of Economics, HuazhongUniversity of Science and Technology, Luoyu Road, Wuhan, China.)

Abstract

The interconnectedness of global economies made it inevitable for countries to isolate themselves rather, they partner with each other majorly for economic and political gains. This often at times have a positive and negatives outcomes base on the fact that the more advanced economy tends to cast shadow on the smooth and predictable movement of some markets in the less advanced economy. On this note, it is essential for scholars to relate and determine the impact and the direction of the movement specifically with regards to stock market performance and Economic Policy Uncertainty (EPU), as it concerns the Gulf Cooperation Council (GCC) region and the continent of Europe. Hence, this study investigates the effect of the changes of European Policy Uncertainty index on net oil exporter countries of the GCC stock market performance. Using the Vector Autoregressive (VAR) methodology to estimate the result, the outcome of the result implies that the impact of the changes in European policy uncertainty index on GCC’s stock markets is negative but not significant; the effect of Dollar exchange rate and US 3-month Treasury bill rate is not significant and finally, the effect of Brent Oil price on GCC countries’ stock markets is positive and significant.

Suggested Citation

  • Alqahtani Abdullah Saeed S & Ouyang Hongbing & Ali Adam, 2017. "The Impact of European Uncertainty on the Gulf Cooperation Council Markets," Journal of Heterodox Economics, Sciendo, vol. 4(1), pages 37-50, June.
  • Handle: RePEc:vrs:joheec:v:4:y:2017:i:1:p:37-50:n:3
    DOI: 10.1515/jheec-2017-0003
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    References listed on IDEAS

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    More about this item

    Keywords

    GCC; Stock Market Performance; European Policy Uncertainty; VAR;
    All these keywords.

    JEL classification:

    • F38 - International Economics - - International Finance - - - International Financial Policy: Financial Transactions Tax; Capital Controls
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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