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Stock market reactions to different types of oil shocks: Evidence from China

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  • Jin Boon Wong

Abstract

This study utilizes a novel method of isolating oil‐price shocks into demand and supply driven contributors to analyze their impacts on stock returns in China. Empirical results suggest that oil shocks related to supply limitations generate positive abnormal stock returns for industries that can help alleviate these constraints. Conversely, demand‐driven oil shocks have mixed effects on industries which may relate to the uncertain impact of increasing demand for goods and higher production costs. These results are robust to alternative specifications of country‐specific control factors and provide evidence that different types of oil shocks have distinctive impacts on industries.

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  • Jin Boon Wong, 2021. "Stock market reactions to different types of oil shocks: Evidence from China," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 41(2), pages 179-193, February.
    • Handle: RePEc:wly:jfutmk:v:41:y:2021:i:2:p:179-193
    DOI: 10.1002/fut.22176
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