Authors : Rajat Kush; Dr. Madhvi Kush; Muhammad Farooq Zafar

Volume/Issue : Volume 10 - 2025, Issue 10 - October

Google Scholar : https://tinyurl.com/3ac672xx

Scribd : https://tinyurl.com/83ejvjsc

DOI : https://doi.org/10.38124/ijisrt/25oct1395

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Abstract : This paper presents an empirical analysis of derivatives usage, impact, and risk management in Gulf Cooperation Council (GCC) financial markets. Utilizing panel logistic regression, VARMA-BEKK-GARCH analysis, and dynamic conditional correlation models, this study examines data spanning from 2010 to 2024 to provide comprehensive insights. Key findings reveal that firm size is the strongest predictor of derivatives usage, increasing the likelihood by 2.4 times. Significant volatility spillover from oil markets to Gulf equity markets is observed, and oil price uncertainty is found to affect sovereign credit risk across all GCC nations. Furthermore, the analysis identifies sectoral heterogeneity in market responses. Despite their benefits, overall derivatives usage in the region remains relatively low. These findings hold important implications for market participants, policymakers, and researchers, enhancing the understanding of derivatives market development in oil-dependent economies.

Keywords : Derivatives Usage, Contingent Pricing, Futures Pricing, International Financial Markets, Financing Policy, Financial Risk and Risk Management, Panel Data Models; Spatio-Temporal Models, Financial Econometrics, Energy and the Macroeconomy (Oil and Related Markets).

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