A meta-analysis on the effects of crude oil market structure on stock market growth

Oil price fluctuations have a significant impact on Iran's economy. Because the major part of Iran's exports is oil and its derivatives, and almost 70% of the government's income comes from the sale of oil. Refining and petrochemical industry companies account for 35% of the stock market value. Therefore, it is natural that their profits will increase with the increase in oil prices. When the price of oil increases, the foreign currency income of the government increases in the same proportion, because as we said, seventy percent of the government's income is obtained from the sale of oil. If the income from oil sales in Iran is not managed properly, the monetary base of the country may increase, which causes inflation in the country. Of course, inflation has a great impact on the growth of the stock market index. When inflation occurs due to the increase in the government's income from the sale of oil, at this time the government will also increase all its expenses. If the price of oil suddenly decreases, the income of the government will also decrease, and this is while the expenses of the government have increased. Oil plays a fundamental role in the economic-social performance of countries; Because it is the most important source of energy for the production of electricity, fuel for vehicles, airplanes, ships and an important material in the production of petroleum and chemical products. Compared to other energy sources such as natural gas and coal, oil is scarcer and its geographic distribution is more unbalanced; Therefore, its practical importance has made it a strategic resource for all countries. With the increase in the share of petroleum products in financial assets, the share of crude oil in the portfolio of investors and as a result, its impact on the trend of the global stock market has greatly increased. Now, the oil market is considered one of the most important markets of financial assets and among the popular assets of investors' portfolios. Oil price changes can affect stock prices through different channels. For example, an increase in the price of oil causes an increase in production costs and product prices, and in this way, it can reduce demand in some industries; Therefore, the increase in the price of oil may damage the company's stock price and force investors to reallocate their investment portfolio. On the other hand, the increase in oil prices can cause inflation and affect the interest rate, exchange rate, income, economic growth, business cycles, confidence and uncertainty of investors and consumers.The purpose of this paper is to investigate the impact of crude oil market structure on stock market volatility in Asian countries. We integrate network analysis with the SGMM estimation technique to achieve the research objective. Network analysis was conducted with 43 Asian countries, while analysis of the impact of crude oil market structure on stock markets was performed with a sample of 19 countries.

A meta-analysis on the effects of crude oil market structure on stock market growth Keywords:

Oil price , Stock market , NARDL , South Asia , Efficient market hypothesis , Asymmetry