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Oil Price and Capital Formation Nexus in GCC Countries: Asymmetry Analyses

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  • Tarek Tawfik Yousef Alkhateeb

    (College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia and Kafr Elkheikh University, Egypt)

  • Haider Mahmood

    (Department of Finance, College of Business Administration, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia)

Abstract

Oil Price (OP) may support the oil dependent economies in term of macroeconomic performance. We investigate the asymmetrical effect of OP on capital formation of Gulf Cooperation Council (GCC) countries. We found long and short relationship in all GCC models. Increasing OP has positive effect on capital formation of all GCC countries except Oman and Qatar in long run. Decreasing OP has positive effect on capital formation in UAE, Saudi Arabia and Bahrain. Increasing OP has positive effect on capital formation of Bahrain and UAE and carries negative impact in Kuwait and Qatar in short run. Decreasing OP positively affects the capital formation of Bahrain and Saudi Arabia and has negative effect in Kuwait, Oman and UAE. Moreover, asymmetrical effect of OP on capital formation is verified in GCC countries except UAE in long run and in all GCC countries except Bahrain and Kuwait in short run.

Suggested Citation

  • Tarek Tawfik Yousef Alkhateeb & Haider Mahmood, 2020. "Oil Price and Capital Formation Nexus in GCC Countries: Asymmetry Analyses," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 146-151.
    • Handle: RePEc:eco:journ2:2020-06-18
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Mahmood, Haider & Chaudhary, A. R., 2013. "Impact of FDI on Income Inequality in Pakistan," MPRA Paper 109460, University Library of Munich, Germany.
    2. Haider Mahmood & Muntasir Murshed, 2021. "Oil Price and Economic Growth Nexus in Saudi Arabia: Asymmetry Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 29-33.
    3. Tomader Elhassan, 2021. "Impact of Oil Price Fluctuations on Economic Growth in Saudi Arabia: Evidence from a Nonlinear ARDL Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 579-585.
    4. Alkathery, Mohammed A. & Chaudhuri, Kausik & Nasir, Muhammad Ali, 2023. "Dependence between the GCC energy equities, global clean energy and emission markets: Evidence from wavelet analysis," Energy Economics, Elsevier, vol. 121(C).
    5. Al-Qahtani, Maleeha Mohammed Zaaf & Alkhateeb, Tarek Tawfik Yousef & Mahmood, Haider & Abdalla, Manal Abdalla Zahed & Mawad, Ghada Shihata Ebrahim & Alkhatib, Maha Ahmed Hussein, 2020. "Exploring the Level of Managerial, Political, Academic, Economic and Social Women Empowerment in Saudi Arabia," MPRA Paper 109447, University Library of Munich, Germany.

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    More about this item

    Keywords

    Oil price; Capital formation; Asymmetry;
    All these keywords.

    JEL classification:

    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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