Recently a new debate has started regarding food and energy issues because food has become an alternative source of energy and energy becoming the main input of agriculture. However, this study attempts to investigate the possible long-term relationship between the prices of crude oil and food commodities represented by maize, wheat, sorghum, soybean, barley, linseed oil, soybean oil, and palm oil. Time series econometric techniques (Unit root tests, Co-integration, and Granger causality) were applied. The study utilizes monthly data over the period of 1980 to 2009. The results of this study reveal that there is a strong evidence of long-term relationship between crude oil and the food commodities prices. A traditional Granger Causality is used to check whether causality exists between two product prices. The outcome suggests that there is unidirectional causality between the prices crude oil and some of the food commodities under examination.
(Center for Research Promotion, 2012-12-04) Awad, Ibrahim M.; Murrar, Abdullah; Ayyad, Hind
In analogues way to the sayings “What goes around comes around” the market price of the company stock’s is
closely related to its performance, the more optimistic, the more the investors will be and hence willing to pay a
higher price for the company's share and vice versa. Seamlessly, given that the goal of the firms is to maximize
the value of the shareholders, the more the intrinsic value of the company stock, the more market value of the
stock price, so that there is a positive correlation between the intrinsic and market value of a particular common
stock. This is founded in the first test of this study. Ironically, the positive correlation does not always imply that
the intrinsic value causes the changes in market value; that is, empirical results of the co-integration test of this
paper reveals that the market value is what causes the changes in intrinsic value, meaning that stock prices in
Palestine Exchange does not significantly depend on fundamentals, but rather on supply and demand forces,
other things being equal.