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

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Publication date
2024-12Keyword
Firm distress riskOil price shocks
Oil-specific demand shock
Aggregate demand shock
Energy diversification
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(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/)Peer-Reviewed
YesOpen Access status
openAccessAccepted for publication
2024-09-20
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Show full item recordAbstract
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.Version
Published versionCitation
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.Link to Version of Record
https://doi.org/10.1016/j.jcomm.2024.100436Type
Articleae974a485f413a2113503eed53cd6c53
https://doi.org/10.1016/j.jcomm.2024.100436