Does Arab Spring Have a Spillover Effect on Dubai Financial Market? *

By Alsharairi, Malek; Abubaker, Wa'el | The Journal of Developing Areas, January 1, 2016 | Go to article overview

Does Arab Spring Have a Spillover Effect on Dubai Financial Market? *


Alsharairi, Malek, Abubaker, Wa'el, The Journal of Developing Areas


(ProQuest: ... denotes formulae omitted.)

INTRODUCTION

Back on December 18th 2010, Mohamed Bouazizi, a young Tunisian vegetable vendor, set himself on fire after police officers banned him from selling vegetables in a humiliating way. This incident triggered a series of protests and demonstrations in Tunisia, and inspired other Arab countries to start revolutions against their regimes; these protests were referred to as the infamous "Arab Spring". On the 25th of January 2011, a wave of demonstrations and protests started in Egypt, a powerful country and one of the largest economies and most populated in the Middle East. The protesters called for an end of the regime of President Hosni Mubarak, demanded economic and political reforms, democratic elections and freedom. Under the pressure of the so-called "The 25th of January Revolution", Hosni Mubarak stepped-down on the 11th of February, 2011. Following his resignation, the Supreme Council of Armed Forces took over the control of Egypt until the parliamentary elections were conducted at the end of November 2011. The elections marked the new era of modern Egypt.

In the wake of dramatic political events like the Arab Spring, the ramifications on stock markets, especially on regional stock markets, are questionable as the signal they send has unclear implications. Although these revolutions are meant to promote democracy and help in improving economic capabilities, they might influence the behavior of investors due to the loss of confidence in the local and regional stock markets. Dubai Financial Market (DFM, hereafter) is one of the most important stock markets in the region.

Dubai derives its importance from being the most vibrant business city in the Middle East, the fastest growing city in the region, as well. Dubai is an international business hub, linking the east and the west economically and culturally. It has a highly reputable transportation infrastructure, advanced educational system, which serves both local and international students, and a world class healthcare system. Dubai being a major business center, has the presence of many large world corporations, along with being a world-known major hub of gold and diamond trading. All of that led Dubai to host the world Expo 2020, which is expected to boost the economy of Dubai city. Being located in an instable region, Dubai's economy is potentially affected by the surrounding political events. Due to the aforementioned importance of Dubai, it is imperative to learn how sensitive its financial market is to the spillovers due to Arab Spring. DFM, one of the three stock markets in UAE, was founded on March 26th, 2000, with 67 listed companies now.

The extant literature does not provide a deep insight into the Arab Spring spillover effects on the regional stock markets. This study is first to analyze the spillover effect of the Arab Spring on DFM, and it adds to the existing literature of the impact of Arab Spring on the stock markets of the Middle East. This study employs GARCH and TGARCH models and Event Study to analyze the volatility and returns of seven indices in DFM.

LITERATURE REVIEW

The relevant literature is rich of empirical studies that examine different hypothetical effects of economic news signals on the response of stock markets during different windows. For example, several studies examine the effect of macroeconomic news on interest rate and foreign exchange markets (Ederington and Lee; 1995), on volatility of Treasury bonds (Jones et al., 1998) or daily returns of the S&P500 index (Rangel, 2011; Chuliá et al., 2010; Shin, 2005; Roll, 1989). Some other studies investigate the impact of a given crisis on stock exchanges performance and volatility, such as the 1987 global crash (Choudhry, 1996) and the 1997 East Asian crisis (Caporale and Spagnolo, 2003). In fact, the political events and risks are perceived among the most influential effects on the stock market performance. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Does Arab Spring Have a Spillover Effect on Dubai Financial Market? *
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.