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Do oil market shocks affect financial distress? Evidence from firm-level global data

; 
Gozgor, Giray
; 
Acheampong, A.
Publication Date
2024-12
End of Embargo
Supervisor
Keywords
Firm distress risk, Oil price shocks, Oil-specific demand shock, Aggregate demand shock, Energy diversification
Rights
(c) 2024 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC license (https://creativecommons.org/licenses/by-nc/4.0/)
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Peer-Reviewed
Yes
Open Access status
openAccess
Accepted for publication
2024-09-20
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Management and Law Publications
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Abstract
This study investigates the impact of three oil price shocks on financial distress of global firms using a dataset of 8130 firms across 48 countries from 2002 to 2022. It also analyses the role of energy diversification in the relationship between oil shocks and firm distress. The findings reveal that aggregate demand and specific demand shocks increase firm distress risk, while supply shocks reduce it. Furthermore, the results suggest that energy diversification mitigates the impact of specific demand shocks on firm distress. The study also implements several robustness checks, and the results remain consistent. Potential policy implications are also discussed.
URI
http://hdl.handle.net/10454/20052
Version
Published version
Citation
Mousavi MM, Gozgor G and Acheampong A (2024) Do oil market shocks affect financial distress? Evidence from firm-level global data. Journal of Commodity Markets. 36: 100436.
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Link to published version
Link to Version of Record
https://doi.org/10.1016/j.jcomm.2024.100436
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Article
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