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OIL PRICE FLUCTUATIONS AND VOLATILITY OF FIRM RISK

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54 Pages : 420-429

http://dx.doi.org/10.31703/gssr.2019(IV-II).54      10.31703/gssr.2019(IV-II).54      Published : Jun 2

Oil Price Fluctuations and Volatility of Firm Risk

Abstract

    Prior literature reports that macro-economic factors of a country affect stock exchange performance and thus firm performance. Recent strands of literature and the fluctuations in currency have a substantive effect on countries' economies. These fluctuations are also a cause of price fluctuations of imports and exports. One such factor which directly affects firm performance is the oil price fluctuations. Thus, this thesis empirically investigates the effect of oil price fluctuations on firm risk for the firms listed on PSX for the period 2012-2017. Secondary data is taken from SBP, Balance Sheet Analysis Database, Pakistan Stock Exchange and the company's website in some cases. Using Panel data, results show that oil prices increase firm risk (beta), which indicates that market participants react to change in oil prices and thus increases risks. The study indicates that policymakers need to control oil prices to keep firm risk in control and thus manage the market towards a better investment environment.

    Macroeconomic Factors, Oil Price Fluctuations, Firm Performance, Firm Risk

    (1) Asif Rahman
    MS Scholar, Institute of Business Studies & Leadership, Abdul Wali Khan University Mardan, KP, Pakistan.
    (2) Muhammad Faizan Malik
    Assistant Professor, Institute of Business Studies & Leadership, Abdul Wali Khan University Mardan, KP, Pakistan.
    (3) Shehzad Khan
    Assistant Professor, Institute of Business Studies & Leadership, Abdul Wali Khan University Mardan, KP, Pakistan.
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Cite this article

APA

CHICAGO

    CHICAGO : Rahman, Asif, Muhammad Faizan Malik, and Shehzad Khan. 2019. "Oil Price Fluctuations and Volatility of Firm Risk." Global Social Sciences Review, IV (II): 420-429 doi: 10.31703/gssr.2019(IV-II).54

HARVARD

    HARVARD : RAHMAN, A., MALIK, M. F. & KHAN, S. 2019. Oil Price Fluctuations and Volatility of Firm Risk. Global Social Sciences Review, IV, 420-429.

MHRA

    MHRA : Rahman, Asif, Muhammad Faizan Malik, and Shehzad Khan. 2019. "Oil Price Fluctuations and Volatility of Firm Risk." Global Social Sciences Review, IV: 420-429

MLA

    MLA : Rahman, Asif, Muhammad Faizan Malik, and Shehzad Khan. "Oil Price Fluctuations and Volatility of Firm Risk." Global Social Sciences Review, IV.II (2019): 420-429 Print.

OXFORD

    OXFORD : Rahman, Asif, Malik, Muhammad Faizan, and Khan, Shehzad (2019), "Oil Price Fluctuations and Volatility of Firm Risk", Global Social Sciences Review, IV (II), 420-429

TURABIAN

    TURABIAN : Rahman, Asif, Muhammad Faizan Malik, and Shehzad Khan. "Oil Price Fluctuations and Volatility of Firm Risk." Global Social Sciences Review IV, no. II (2019): 420-429. https://doi.org/10.31703/gssr.2019(IV-II).54