Title: Oil prices and stock market returns among emerging seven economies: empirical evidence from the recent decade

Authors: Mearaj Ud Din Dar; Khursheed Ahmad Butt

Addresses: Department of Commerce, University of Kashmir, J&K, 192301, India ' Department of Commerce, University of Kashmir, J&K, 192301, India

Abstract: Crude oil is one of the most important components and input for almost all manufacturing and service activities. Given its importance, oil has been among the major exports or imports of all the countries, especially for emerging economies to fuel their economic growth. Further oil prices have been very volatile during the recent decade. Therefore the present study is an attempt to examine the impact of oil prices on the stock returns of the most progressive emerging market group called EM7 (India, China, Russia, Brazil, Indonesia, Mexico and Turkey). The study employs ARDL modelling as a novel technique of cointegration on monthly time series data for the most recent decade starting from 2010. The study found that oil price changes pose a significant positive impact on stock returns of oil exporting countries (Russia, Mexico, Brazil) while a negative significant impact on stock market returns of oil importing countries (India, China, Indonesia, Turkey).

Keywords: oil price; stock returns; emerging economies; ARDL; time series.

DOI: 10.1504/IJBCG.2022.128171

International Journal of Business Competition and Growth, 2022 Vol.8 No.1/2, pp.112 - 127

Received: 25 Aug 2022
Accepted: 15 Oct 2022
Published online: 09 Jan 2023 *

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