The effects of the exchange rate and change in world market prices of oil on market capitalization of selected oil companies in Philippines and China for the years 2008-2015

• Main Authors: Diokno, Nicole, Lim, Elgene Marcus, Ong, Anabel, So, Kimberly
• Format: text
• Language: English
• Published: Animo Repository 2016
• Subjects: Stock exchanges > Philippines; Petroleum products > Prices > Philippines; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/9014
• Institution: De La Salle University

This study compared the impact of oil prices and exchange rate on the market capitalization of Philippine and Chinese oil firms recognizing the vast disparity between the countries regarding the size the said companies are domiciled in. The researchers mainly employed vector autoagression (VAR), vector error correction model, forecast Error variance decomposition (FEVD), and impulse response function (IRF) to obtain the results. Interestingly, the researchers found out that the impact of oil prices and exchange rate highly depended on the sector the firm is engaged in namely: upstream, midstream, downstream, or integrated due to the sectors' different perceptions regarding the tested variables. Furthermore, how dependent on energy a country is plays a role in vulnerability come oil fluctuations with China's economy showing an impact of oil prices on the exchange rate. In the Philippines' situation, there was no relationship between exchange rates and oil prices.