On the interaction between energy price and firm size in Indian economy

This paper examines the connection between oil price changes and size of firms listed in Indian stock market. A three-factor Fama-French model along with oil price variables is estimated using data from a panel of 1535 firms. Results show that there is a positive relationship between growth in oil price and stock return. Similarly, the size of the firm is also positively related to stock return. However, oil price uncertainty shows a negative relationship with stock return. Overall, these results imply that targeted measures should be put in place by the policy makers to safeguard the interests of the small and medium size firms in India.