Economics
Nastaran Shahvari
Abstract
In this article, we provide an in-depth study of the link between global commodity prices and the shocks market. Many Middle East countries are exports dependent and rely heavily on the global price of their primary commodities to make rational economic decisions. It is against this background that this ...
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In this article, we provide an in-depth study of the link between global commodity prices and the shocks market. Many Middle East countries are exports dependent and rely heavily on the global price of their primary commodities to make rational economic decisions. It is against this background that this study investigates the level of interdependence between global commodities prices and stock market returns in selected Middle East countries. For this empirical investigation, the two largest stock markets were selected based on market capitalization namely Tehran Stock Exchange (TSE) and Saudi Stock Exchange, TADAWUL (TASI). Specifically, we examined the relationship between global commodities prices and stock market returns and the direction of causality between the variables following Eagle Granger causality procedures. In addition, we determined the effect of global commodities` price movement on stock market returns using the ARDL estimation technique. The results of our analyses show that there is a significant long-run relationship between global commodities prices and stock market returns. Also, there exists a largely bidirectional causal relationship between global commodities prices and stock market returns in the two markets. Furthermore, the results of ARDL estimation reveal that global commodities prices have short-run and long-run effects on stock market returns in the two markets. These findings are robust to a battery of robustness checks. These results support the investor's decision-making process. In addition, the results of this survey are important for policymakers to strengthen the stock market to drive economic growth.
NWOSA Philip Ifeakachukwu
Volume 5, Issue 3 , March 2018, , Pages 181-189
Abstract
Over the years, there has been unresolved debate in the literature and studies have generated mixed results on the direction of influence between trade liberalization and trade tax revenue. Against this background, this study examined the causal nexus between trade liberalization and trade tax revenue ...
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Over the years, there has been unresolved debate in the literature and studies have generated mixed results on the direction of influence between trade liberalization and trade tax revenue. Against this background, this study examined the causal nexus between trade liberalization and trade tax revenue in Nigeria with data spanning 1986 to 2014 with a view to determining whether there is any complementarity between trade policy and revenue generation drive of the Nigerian government. Utilizing a bi-variate VAR model, the study observed a unidirectional causation from trade tax revenue to trade liberalization. Base on this finding, the study recommended the need for efficient implementation and functioning of trade policy and to de-emphasize the focus on crude-oil in order to ensure the successful performance of trade liberalization policy. In addition, the implementation of the trade liberalization policy should be guided to mitigate any adverse consequence.