Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/205142
Authors: 
Kelikume, Ikechukwu
Muritala, Omotayo
Year of Publication: 
2019
Citation: 
[Journal:] International Journal of Management, Economics and Social Sciences (IJMESS) [ISSN:] 2304-1366 [Volume:] 8 [Year:] 2019 [Issue:] 3 [Pages:] 169-194
Abstract: 
This study examined the impact of oil price on African stock markets. Using quarterly data from five selected oil producing countries with stock market presence, from Q1:2010 to Q4:2018, the study deployed dynamic panel analysis technique for a model comprising stock returns, real gross domestic product growth rate, exchange rate and OPEC basket price. From the findings, an adverse effect of oil prices existed on stock markets in Africa, attributable to fragmented and underdeveloped capital markets. Also, real gross domestic product growth rate had a positive impact on African stock markets, thus, confirming that economic growth positively influences stock returns in the African stock markets. The relationship exhibited by stock markets and the oil price has an immediate implication of shifting foreign direct investments in and away from stock markets in African oil-dependent economies. Based on the empirical findings, the study recommended that oil-exporting developing countries should devise strategies that can ensure stability in their capital markets by vigorously pursuing pro-growth policies irrespective of the shocks in oil price and other exogenous macroeconomic indicators.
Subjects: 
Stock returns
oil price
exchange rate
African countries
unit root
panel regression
JEL: 
C32
C87
G12
N27
Q41
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Article
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