The Impact of Oil Price on Economic Growth in Middle-Income Oil-Importing Countries: A Non-Linear Panel ARDL Approach

Akinsola, Motunrayo O.; Odhiambo, Nicholas M.

doi:10.2478/auseb-2022-0003

Cited by 2 publications

(2 citation statements)

References 45 publications

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“…Likewise, Eyden et al (2019), Katircioglu et al (2015) find that the price of oil is negatively impacting the economic growth of OECD countries in general, including the oil exporters among them. In the same vein, Alkhateeb and Sultan (2019), Akinsola and Odhiambo (2020), Kriskkumar and Naseem (2019), Akhmad et al (2019) all find that, it is a negative relationship that exists between oil price changes and economic growth for different countries. Similarly, Moshiri (2015) indicated that different responses to oil price shock can be explained according to the individual country's differences in terms of institutional quality.…”

Section: Introductionmentioning

confidence: 91%

Oil Price Change and Economic Growth: Evidence from Net Sub-Saharan Africa Oil Exporting Countries

Babuga

Naseem

2022

IJEEP

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This paper aimed at examining the long run relationship between the oil price change and economic growth for Sub-Saharan Africa (SSA) net oil exporters (Angola, Cameroon, Congo (Democratic Republic), Congo (The Republic), Equatorial Guinea, Gabon and Nigeria) with the sole purpose of pinpointing the threshold level where an increase beyond that is no longer or even contributing negatively to the economic growth of these countries. Based on the dynamic heterogenous panel PMG estimation, the empirical results show that a threshold level exists between oil price increase and economic growth for these countries, where an increase in oil price (op2) depicts a negative sign which is non-linear and at the same time signifying an inverted u shape relationship with the real GDP (rgdpc) as an indicator of economic growth. As the finding suggested, the rising oil price above certain threshold triggers fall in real GDP. However, the economies of these countries depend largely on oil revenue, therefore, economic diversification, saving and investing the excess of crude oil revenue at the time of higher oil prices became necessary to them in order to prevent their economies against the vagaries of volatility and uncertainty of the oil price.

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Section: Introductionmentioning

confidence: 91%

Oil Price Change and Economic Growth: Evidence from Net Sub-Saharan Africa Oil Exporting Countries

Babuga

Naseem

2022

IJEEP

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“…Despite the extensive literature on this topic (Lee et al , 1995; Rafiq et al , 2009; Soytas et al , 2009; Aguiar-Conraria and Soares, 2011; Tiwari, 2013, etc.) the relationship between oil price fluctuations and economic activity is complex and varies depending on the country’s level of oil dependence (Nasir et al , 2019; Akinsola and Odhiambo, 2020) and the causes of shocks (Wan and Kao, 2015). However, several theoretical explanations for this relationship have been proposed.…”

Section: Introductionmentioning

confidence: 99%

Leading and lagging role between financial stress and crude oil

Gençyürek

2023

SEF

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Purpose The crude oil market plays a key role in addressing the issue of energy economics. This paper aims to detect the causality relationship between the crude oil market and economy based on the financial system. Design/methodology/approach This paper used the static and dynamic Hatemi-J Bootstrap Toda–Yamamoto and Diebold–Yilmaz connectedness index. The Hatemi-J Bootstrap Toda-Yamamoto approach allows researchers to use nonstationary data and that method is robust to nonnormal distribution and heteroscedasticity. The Diebold–Yilmaz connectedness index model provides researchers to detect the power of connectedness besides linkage direction. The analyzed period is the span from January 3, 2005 to October 3, 2022. Findings The results show bidirectional causality in the full sample but unidirectional causality before and after the 2008 financial crisis. During the 2008 financial crisis period and the COVID-19 period, there was a bidirectional and unidirectional causality, respectively. The connectedness approach indicates that the crude oil market affects financial stress through investors’ risk preferences. Research limitations/implications The Diebold–Yilmaz spillover index model is based on vector autoregression methods with a stationarity precondition. However, some of the five dimensions that constitute the financial stress index (FSI) are nonstationary in level. Therefore, the authors takes the first difference of the nonstationary data. Practical implications The linkage between the crude oil market and the FSI provides useful information for investors and policymakers. For instance, this paper indicates that an investor wanted to forecast future value of the crude oil (financial stress) should consider the current and past values of financial stress (crude oil). Moreover, policymaker should consider the crude oil market (FSI) to make a policy proposal for financial system (crude oil market). Originality/value Recently, indicators of economic activity levels (economic policy uncertainty, implied volatility index) have begun to be considered to analyze the relationship between energy and the economy but very little is known in the literature about the leading and lagging roles of data in subsample periods and the linkage channel. The other originality of this research is using the new econometric approaches.

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The Impact of Oil Price on Economic Growth in Middle-Income Oil-Importing Countries: A Non-Linear Panel ARDL Approach

Cited by 2 publications

References 45 publications

Oil Price Change and Economic Growth: Evidence from Net Sub-Saharan Africa Oil Exporting Countries

Oil Price Change and Economic Growth: Evidence from Net Sub-Saharan Africa Oil Exporting Countries

Leading and lagging role between financial stress and crude oil

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