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Country Effects, Industry Effects and the Effectiveness of International Diversification Within the GCC Region

Author

Listed:
  • Sulaiman Al-Jassar

    (Department of Finance and Financial Institutions, Kuwait University, Kuwait)

  • Imad A. Moosa

    (School of Economics, Finance and Marketing, RMIT, 445 Swanston Street, Melbourne, Victoria 3000, Australia)

Abstract

A hedging approach is used to examine the effectiveness of international diversification within the Gulf Co-operation Council (GCC) region. By using data covering the six GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE) and various sectors, we find that diversification across whole markets is more effective than diversification across sectors, irrespective of whether the constructed portfolios contain two or more assets. The results also reveal that diversification among several markets or sectors is more effective than diversification among two markets or sectors.

Suggested Citation

  • Sulaiman Al-Jassar & Imad A. Moosa, 2019. "Country Effects, Industry Effects and the Effectiveness of International Diversification Within the GCC Region," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 22(04), pages 1-18, December.
    • Handle: RePEc:wsi:rpbfmp:v:22:y:2019:i:04:n:s0219091519500280
    DOI: 10.1142/S0219091519500280
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