ESTIMATING THE IMPACT OF OIL RENTS ON THE ECONOMIC GROWTH OF THE OPEC COUNTRIES
Keywords:
oil rents, economic growth, oil-exporting countries, panel data approach, fixed effects modelAbstract
This study aimed to know the effect of oil rents on the economic growth of in a panel of nine selected oil exporting countries by the panel integration for 1997 to 2015. Our findings suggest that there is one-way strong causality running from oil rents to GDPG and foreign direct investment. Also, the long run elasticity coefficient reveals that the 1% change in oil rents will change the GDP growth by 0.46%. The results of the coefficient (ECM) are -0.1459 meaning that system corrects its previous period disequilibrium at a speed of 14.5% annually to reach at the steady state. OPEC countries should pursue an integrated economic policy by diversifying sources of GDP and not relying solely on oil revenues because the latter is heavily affected by fluctuations in world oil prices and the exchange rate against local currencies.
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