The Impact of Oil Prices on East and Southeast Asian Economies: Evidence from financial markets

Author Name Willem THORBECKE (Senior Fellow, RIETI)
Creation Date/NO. July 2018 18-E-043
Research Project East Asian Production Networks, Trade, Exchange Rates, and Global Imbalances
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Oil prices have been volatile. To investigate how oil price swings affect Asian economies, this paper examines how they affect industry and aggregate stock returns. Economic theory implies that there is a strong link between a sector's stock return and its economic activity. Evidence presented here indicates that sectors such as electricity, airlines, and industrial transportation are helped by oil price falls, and that sectors such as oil and gas production and exploration are harmed. The findings also reveal that many industries within each country are impacted by oil prices. The paper concludes by offering several suggestions to help Asian economies weather the effects of oil price changes.

Published: Thorbecke, Willem, 2019. "How oil prices affect East and Southeast Asian economies: Evidence from financial markets and implications for energy security," Energy Policy, Vol. 128, pp. 628-638