Abdul Adzim, Abdul Hamid (2022) Study on the impact of crude oil price and macroeconomic factors on the stock prices of firms: The case of Malaysia for the period 1999-2019. Doctoral thesis, Asia e University.
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Abstract
This Research covers a study on the impact of crude oil price and macroeconomic factors on the prices of stocks of companies traded on Malaysia’s stock market. Because oil price in recent times have frequently fluctuated over a wide range, it is in the interest of stock market investors and observers to comprehend if and how oil price changes affect firm stock values, particularly when oil price rises. The New Theory of the Firm postulates that profit maximization is the key objective of a firm, and that the present value of a firm is derived from the future profits expected from the firm’s business operation. Thus, notable changes in oil price (as an element in business operation) are expected to result in counteractive decisions by the firm to maximize profit and stock value. Concurrently, because the firm operates in the context of economic conditions of a nation, value of the firm is also expected to be influenced by macroeconomic factors. The study investigates the relationship between the stock prices of twenty firms with crude oil price and macroeconomic factors over the 1999- 2019 period. Findings from the research show that oil price had significant negative link with the stock prices of 15 percent the firms and significant positive relation with 25 percent of the firms, and no significant effect on 60 percent of the cases. Such varied effects are explainable in the context of profit-maximization behaviour by firms as the increased cost of the oil can be shifted to the oil users in various degrees. As such, the firm–level demand conditions for their products are important. Similarly, the national GDP (as the main macroeconomic factor) had mixed results due to its varied impact on economic growth and business outlook.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Uncontrolled Keywords: | crude oil, oil price, macroeconomic, Malaysia |
| Depositing User: | Muhamad Aizat Nazmi Mohd Nor Hamin |
| Date Deposited: | 08 Apr 2022 07:14 |
| Last Modified: | 19 Jul 2022 04:11 |
| URI: | http://ur.aeu.edu.my/id/eprint/939 |
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