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How Does Market Share Impacted Oil Oligopoly Firms’ Profits Volatility Under the Price Shock?

Tianyuan Xie


This paper aimed to identify how the oligopoly firms’ market shares related to the profit stand ability. I selected firms from oil industry, which is widely recognized as oligopoly market, as an example and see if higher market share will stabilized firms profits in the face of oil price shock in 2020, caused by both global pandemic Russia–Saudi Arabia oil price war. I found that in the long-run, the firm’s market share is negatively correlated with firms’ profit volatilities. However, large firms’ profits fluctuates more in this price shock compared to small firms’ profits. Reasons might be small firms from my samples are more from OPEC countries which are less impacted by this price shock. Also, the price shock prices brought more business uncertainties for big oil companies than for small ones in both stock prices and other factors. This account for higher profit fluctuation for the large oil firms.


Oligopoly; Market Share; Oil Industry; Profitability

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DOI: http://dx.doi.org/10.18686/fm.v7i2.4389