RESEARCH ARTICLE

Does oil price affect the value of firms? Evidence from Tunisian listed firms

  • Kaouther ZAABOUTI 1 ,
  • Ezzeddine BEN MOHAMED , 2 ,
  • Abdelfettah BOURI 1
Expand
  • 1. Faculty of Economics and Management of Sfax, University of Sfax, Monastir 5046, Tunisia
  • 2. Department of Accounting, College of Business & Economics, Qassim University, Buraidah 51431, Kingdom of Saudi Arabia

Received date: 01 Mar 2015

Accepted date: 29 May 2015

Published date: 29 Feb 2016

Copyright

2016 Higher Education Press and Springer-Verlag Berlin Heidelberg

Abstract

A new debate on the potential impact of oil price changes on the value of firms was initiated in this paper. Using a stochastic frontier approach, an attempt was made to derive the optimal value Q* of firms and calculate the Q value observed. Then the shortfall (Q*–Q) which represents the inefficiency term was explained. Starting from 19 industrial Tunisian firms listed on the Tunis Stock Exchange between 2007 and 2011, the fact that variation of oil prices can largely explain distortions in the value of firms was empirically demonstrated.

Cite this article

Kaouther ZAABOUTI , Ezzeddine BEN MOHAMED , Abdelfettah BOURI . Does oil price affect the value of firms? Evidence from Tunisian listed firms[J]. Frontiers in Energy, 2016 , 10(1) : 1 -13 . DOI: 10.1007/s11708-016-0396-8

1
Huang R D, Masulis R W, Stoll H R. Energy shocks and financial markets. Journal of Futures Markets, 1996, 16(1): 1–27

DOI

2
Jones C M, Kaul G. Oil and the stock markets. Journal of Finance, 1996, 51(2): 463–491

DOI

3
Hamilton J D. Oil and the m+9878 acroeconomy since World War II. Journal of Political Economy, 1983, 91(2): 228–248

DOI

4
Lizardo R A, Mollick A V. Oil price fluctuations and U.S. dollar exchange rates. Energy Economics, 2010, 32(2): 399–408

DOI

5
Sadorsky P. Oil price shocks and stock market activity. Energy Economics, 1999, 21(5): 449–469

DOI

6
Chiou J S, Lee Y H. Jump dynamics and volatility: oil and the stock markets. Energy, 2009, 34(6): 788–796

DOI

7
Haushalter G D, Heron R A, Lie E. Price uncertainty and corporate value. Journal of Corporate Finance, 2002, 8(3): 271–286

DOI

8
Boyer M M, Filion D. Common and fundamental factors in stock returns of Canadian oil and gas companies. Energy Economics, 2007, 29(3): 428–453

DOI

9
Ramos S B, Veiga H. Risk factors in oil and gas industry returns: international evidence. Energy Economics, 2011, 33(3): 525–542

DOI

10
Dayanandan A, Donker H. Oil prices and accounting profits of oil and gas companies. International Review of Financial Analysis, 2011, 20(5): 252–257

DOI

11
Sadorsky P. Assessing the impact of oil prices on firms of different sizes: its tough being in the middle. Energy Policy, 2008, 36(10): 3854–3861

DOI

12
Doğrul H G, Soytas U. Relationship between oil prices, interest rate, and unemployment: evidence from an emerging market. Energy Economics, 2010, 32(6): 1523–1528

DOI

13
Faff R W, Brailsford T J. Oil price risk and the Australian stock market. Journal of Energy Finance & Development, 1999, 4(1): 69–87

DOI

14
Buhl H U, Strauβ S, Wiesent J. The impact of commodity price risk management on the profits of a company. Resources Policy, 2011, 36(4): 346–353

DOI

15
Mohanty S, Nandha M, Habis E, Juhabi E. Oil price risk exposure: the case of the U.S. Travel and Leisure Industry. Energy Economics, 2014, 41: 117–124

DOI

16
Ye D, Liu S, Kong D. Do efforts on energy saving enhance firm values? Evidence from China’s stock market. Energy Economics, 2013, 40: 360–369

DOI

17
Elyasiani E, Mansur I, Odusami B. Oil price shocks and industry stock returns. Energy Economics, 2011, 33(5): 966–974

DOI

18
Phan D, Nguyen H, Faff R. Uncovering the asymmetric linkage between financial derivatives and firm value: the case of oil and gas exploration and production companies. Energy Economics, 2014, 45: 340–352

DOI

19
Jin Y, Jorion P. Firm value and hedging: evidence from U.S. oil and gas producers. Journal of Finance, 2006, 61(2): 893–919

DOI

20
Cameron K, Schnusenberg O. Oil prices, SUVs, and Iraq: an investigation of automobile manufacturer oil price sensitivity. Energy Economics, 2009, 31(3): 375–381

DOI

21
Aggarwal R, Akhigbe A, Mohanty S K. Oil price shocks and transportation firm asset prices. Energy Economics, 2012, 34(5): 1370–1379

DOI

22
Tsai C L. The high-frequency asymmetric response of stock returns to monetary policy for high oil price events. Energy Economics, 2013, 36: 166–176

DOI

23
Aye G C, Dadam V, Gupta R, Mamba B. Oil price uncertainty and manufacturing production. Energy Economics, 2014, 43: 41–47

DOI

24
Narayan P K, Sharma S S. New evidence on oil price and firm returns. Journal of Banking & Finance, 2011, 35(12): 3253–3262

DOI

25
Jiménez-Rodríguez R. The impact of oil price shocks: evidence from the industries of six OECD countries. Energy Economics, 2008, 30(6): 3095–3108

DOI

26
Basher S A, Sadorsky P. Oil price risk and emerging stock markets. Global Finance Journal, 2006, 17(2): 224–251

DOI

27
Dossogne S. Valorisation and Cession of Firms from Intension to Finalization: From Value to Price. 2nd ed. Wallonia, Belgium, 2006, 227

28
Habib M A, Ljungqvist A. Firm value and managerial incentives: a stochastic frontier approach michael. 2015–01–12

29
Oxelheim L, Randoy T. The impact of foreign board membership on firm value. Journal of Banking & Finance, 2003, 27(12): 2369–2392

DOI

30
Wattanatorn W, Kanchanapoom T. Oil prices and profitability performance: sector analysis. Procedia: Social and Behavioral Sciences, 2012, 40: 763–767

DOI

31
Lee B, Yang C W, Huang B. Oil price movements and stock markets revisited: a case of sector stock price indexes in the G-7 countries. Energy Economics, 2012, 34(5): 1284–1300

DOI

32
Vickery J. How and why do small firms manage interest rate risk? Journal of Financial Economics, 2008, 87(2): 446–470

DOI

33
Chen M Y. Adjustments in managerial ownership and changes in firm value. International Review of Economics & Finance, 2013, 25: 1–12

DOI

34
Henriques I, Sadorsky P. The effect of oil price volatility on strategic investment. Energy Economics, 2011, 33(1): 79–87

DOI

35
Ratti R A, Seol Y, Yoon K H. Relative energy price and investment by European firms. Energy Economics, 2011, 33(5): 721–731

DOI

36
Yoon K H, Ratti R A. Energy price uncertainty, energy intensity and firm investment. Energy Economics, 2011, 33(1): 67–78

DOI

37
Mak Y T, Kusnadi Y. Size really matters: further evidence on the negative relationship between board size and firm value. Pacific-Basin Finance Journal, 2005, 13(3): 301–318

DOI

38
Eisenberg T, Sundgren S, Wells M T. Larger board size and decreasing firm value in small firms. Journal of Financial Economics, 1998, 48(1): 35–54

DOI

39
Coles J L, Daniel N D, Naveen L. Boards: Does one size fit all? Journal of Financial Economics, 2008, 87(2): 329–356

DOI

40
Baccar A, Ben Mohamed E, Bouri A. Managerial optimism, overconfidence and board characteristics: towards a new role of corporate governance. Australian Journal of Basic and Applied Sciences, 2013, 7(7): 287–301

41
Ben Mohamed E, Baccar A, Fairchild R, Bouri A. Does corporate governance affect managerial optimism: evidence from NYSE panel data firms. International Journal of Euro-Mediterranean Studies, 2012, 5(1): 41–56

DOI

42
Ben Mohamed E, Fairchild R, Bouri A. Investment cash flow sensitivity under managerial optimism: new evidence from NYSE panel data firms. Journal of Economics Finance and Administrative Sciences, 2014, 19(36): 11–18

DOI

43
Kumbhakar S C, Lovell C A K. Stochastic frontier analysis. Journal of Banking & Finance, 2000, 36: 1311–1319

44
Bhaumik S K, Das P K, Kumbhakar S C. A stochastic frontier approach to modelling financial constraints in firms: an application to India. Journal of Banking & Finance, 2012, 36(5): 1311–1319

DOI

45
Aigner D, Lovell C A K, Schmidt P. Formulation and estimation of stochastic frontier production function models. Journal of Econometrics, 1977, 6(1): 21–37

DOI

46
Pawlina G, Renneboog L. Is investment-cash flow sensitivity caused by the agency costs or asymmetric information? Evidence from the UK. European Financial Management, 2005, 11(4): 483–513

DOI

47
Ben Mohamed E, Jarboui S, Baccar A, Bouri A. On the effect of CEOs’ personal characteristics in transport firm value? A stochastic frontier model. Case Studies on Transport Policy, 2015, 3(2): 1–6

48
Oxelheim L, Randøy T. The impact of foreign board membership on firm value. Journal of Banking & Finance, 2003, 27(12): 2369–2392

DOI

49
Bhagat S, Bolton B. Corporate governance and firm performance. Journal of Corporate Finance, 2008, 14(3): 257–273

DOI

50
Kouwenberg R. Does voluntary corporate governance code adoption increase firm value in emerging markets? Evidence from Thailand. 2006–11–30

Outlines

/