The End of GCC Crisis and its Impact on the Saudi Stock Exchange: An Event Study Approach

International Journal of Economics and Management Studies

© 2023 by SSRG - IJEMS Journal

Volume 10 Issue 8

Year of Publication : 2023

Authors : Somaiyah Alalmai

10.14445/23939125/IJEMS-V10I8P101

How to Cite?

Somaiyah Alalmai, "The End of GCC Crisis and its Impact on the Saudi Stock Exchange: An Event Study Approach," SSRG International Journal of Economics and Management Studies, vol. 10,  no. 8, pp. 1-6, 2023. Crossref, https://doi.org/10.14445/23939125/IJEMS-V10I8P101

Abstract:

In this research paper, we investigate the impact of the Qatari-Saudi reconciliation on the Saudi stock market return by implementing an event study approach. To analyze the event's effect, we calculate the abnormal return and the cumulative abnormal return around the announcement date using two methods. First, we apply the mean-adjusted returns model, then the OLS market model. The empirical evidence shows that the initial market reaction is negative; however, the estimated CARs are insignificant in most event windows other than for [−1, 1], [−2, 2], and [−3, 3]. The results highlight the limited economic effects experienced by Saudi Arabia.

Keywords:

Event study, GCC stock markets, Market reaction, Qatar blockade, Saudi Arabia.

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