Oil price shocks, market efficiency, and volatility spillovers: Evidence from BRICS countries

Islamic finance has grown rapidly in the recent years particularly in the Middle East and the world. It receives a great attention of bankers and financial scholars due to its stability during financial shocks and crises. The paper uses empirical analysis to test the role of Islamic banking in enhancing the economic growth of United Arab Emirates (UAE). Gross Domestic Product (GDP), Gross formation (GF), and Foreign Direct Investment (FDI) are used as representatives for economic growth, while Islamic banks’ investments are used as a representative for Islamic financial sector in the UAE. The study uses time series techniques to test the link between the variables. In the current study, co-integration along with error correction models is utilized. All econometric work is done using Eviews. The findings reveal that the causal relationship between Islamic banks’ investments and economic growth of UAE is supply-leading direction. Furthermore, the findings depict that Islamic investments have contributed in increasing investments and in bringing FDI into the country in the long-term. The study also shows that there is two-way association between Islamic banks’ investments and FDI. It shows that FDI supports Islamic banking and Islamic banking brings FDI. The paper concludes that authorities of the UAE should devote more attention for this growing banking sector by facilitating regulations for establishing new Islamic banks and then creating a suitable environment for their growth and progress in the UAE.

The paper investigates the correlation between stock market, real estate market, and economic growth in Vietnam, which is an emerging country. Quarterly data in Vietnam from the third quarter of 2004 to the third quarter of 2018 were utilized. By using the Autoregressive Distributed Lag (ARDL) approach, the results reveal that economic growth is positively associated with stock market and real estate market. An unprecedented finding of this study is that economic growth (GDP) is more correlated to stock market efficiency (SME) than net trading value by foreign investors (FI). Moreover, global financial crisis (GFC) exerts a negative impact on economic growth and real estate market in Vietnam. Further, net trading value by foreign investors (FI) also negatively influences real estate market (REM) in the short term. The study has greatly succeeded in giving first empirical evidence on the relationship between stock market, real estate market, and economic growth in Vietnam. More than that, the results show the key role of global financial crisis in this correlation. The findings are valuable to economies around the world, especially bringing a practical and meaningful value to developing countries like Vietnam.

This paper investigates the relationship of cryptocurrencies with four traditional assets: equity, fiat currencies, crude oil, and gold in Nigeria, Vietnam, the Philippines, Turkey, and Peru. According to Statista’s 2020 Cryptocurrency Adoption Survey, these five countries showed high levels of crypto usage and ownership. Emerging economies attract the attention of portfolio managers due to the high returns associated with assets originating from these countries. The paper explores the possibility of creating a multi-asset portfolio, including cryptocurrencies. Vector Autoregression Granger causality and Johansen Cointegration tests are conducted to study the relationship between each traditional asset and cryptocurrencies. The study period is from October 2017 to June 2021. The composite Crypto Index was created using the top seven cryptocurrencies based on market capitalization. The Granger Causality test results reveal no causality between Nigeria’s chosen traditional assets and the cryptocurrency index. In the case of the Philippines, there is a unidirectional causality relationship from crypto returns to currency returns; and gold returns to crypto index returns. In Vietnam, stock index returns cause crypto returns; in Peru, gold returns cause crypto returns; and in Turkey, crypto returns cause currency returns. None of the countries has exhibited a bidirectional relationship between traditional assets and the crypto index. The robustness of the causality relations is checked using the Johansen Cointegration test. All the assets taken under study, country-wise, are cointegrated with one another. Hence, when building a multi-asset portfolio covering these five emerging nations, cryptocurrencies do not offer investors diversification, hedging, or haven benefits.