Background: Given the shale oil glut that culminated in the most recent and continuing oil price drop from June 2014 and the global financial crisis of 2008 that triggered a cyclical downturn in oil prices and stock market activity, this study investigates the impact of Brent oil price shocks on oil related stocks in Nigeria. Methods: This study uses a vector autoregressive (VAR) model with the impulse response function and the forecast variance decomposition error. Findings: The empirical evidence reveals that oil price shocks have a negative impact on Nigerian oil and gas company stocks. In theory, this situation should apply to oil importing countries and is therefore uncharacteristic of an oil exporting country like Nigeria. Conclusions: The findings suggest that oil companies operating in Nigeria should diversify their investments to protect their business from single-sector market forces, and can also embrace the advantages of outsourcing some of their operations to specialist providers to increase flexibility and reduce operating costs. Finally, for vertically integrated oil and gas companies, oil price hedging and energy risk management will be beneficial because it will mean that these companies will take a position in the crude oil futures market. This will allow for better cash flow management and flexibility. Originality/value: This study extends the existing literature in two distinct ways. First, it provides, to the best of our knowledge, the first examination of the impact of oil price shocks on stock market activities with a focus on the market returns of oil and gas companies listed in the Nigerian Stock Exchange. Second, this study uses daily data because high frequency data contain more information than lower frequency data does, and lower frequency data average out too much important information.
International remittances have grown to become an integral source of finance for development. Existing literature posits that there is an association between remittances and growth in developing countries. Economic growth models highlight the importance of capital accumulation and high level financial flows, the inadequacy of which characterizes developing countries and often explains their fate. It is argued that remittances will provide a panacea to the serious poverty experienced in such developing economies by increasing financial flows and household income, which in turn stimulates consumption, savings, economic growth and ultimately development. The robustness of this relationship is, however, often questioned. Indeed, the propensity of remittances to achieve these aspirations very much hinges on the determining factors motivating the remitters and the magnitude of the remittances. Hence, given the significant flows of remittances to the developing countries, this study attempts an analysis of the determinants of remittances to Nigeria. Key macroeconomic variables with theoretical potentials of influencing the level of remittances received were subjected to econometric model testing using time series data from 1980 to 2013. The results indicate that the level of remittances received is more a function of portfolio motives than other macroeconomic factors.
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