The End of GCC Crisis and its Impact on the Saudi Stock Exchange: An Event Study Approach

In this research paper, we investigate the impact of the Qatari-Saudi reconciliation on the Saudi stock market return by implementing an event study approach. To analyze the event's effect, we calculate the abnormal return and the cumulative abnormal return around the announcement date using two methods. First, we apply the mean-adjusted returns model, then the OLS market model. The empirical evidence shows that the initial market reaction is negative; however, the estimated CARs are insignificant in most event windows other than for [−1, 1], [−2, 2], and [−3, 3]. The results highlight the limited economic effects experienced by Saudi Arabia.