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The Effect of Oil Prices on the Economic Growth of Oil Exporting Countries Bordering the Caspian Sea: Panel Data Analysis

Author

Listed:
  • Artur Bolganbayev

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan.)

  • Kundyz Myrzabekkyzy

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan.)

  • Sabit Baimaganbetov

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan.)

  • Dinmukhamed Kelesbayev

    (Khoja Akhmet Yassawi International Kazakh-Turkish University, Turkestan, Kazakstan.)

Abstract

Oil price volatility has increased tremendously in the last decade and has become the most difficult commodity to predict. The price of Brent crude oil was 42 US dollars in 2020, whereas it is 72 dollars today. All countries are adversely affected by this volatility. But the severity of it differs between countries. Especially oil-exporting countries are expected to be affected more negatively. Among the countries bordering the Caspian Sea, the national incomes of Russia, Iran, Kazakhstan, and Azerbaijan are largely based on oil exports; therefore they are heavily affected by the volatility in oil prices. Therefore, energy security, which is one of the most important international security topics, is a political and economic priority for the countries bordering the Caspian Sea. In this study, the effects of the price changes in Brent crude oil on the economic growth and energy security of these countries were examined using Panel data analysis with the quarterly data for the period 2007-2020. The order of integration of the variables discussed in the study is examined using the Pesaran (2007) panel unit root test, which takes the cross-sectional dependence into account. The long-term relationship between Brent oil price and economic growth is examined using the Westerlund (2007) cointegration test. The results show that oil prices affect economic growth.

Suggested Citation

  • Artur Bolganbayev & Kundyz Myrzabekkyzy & Sabit Baimaganbetov & Dinmukhamed Kelesbayev, 2021. "The Effect of Oil Prices on the Economic Growth of Oil Exporting Countries Bordering the Caspian Sea: Panel Data Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 432-437.
    • Handle: RePEc:eco:journ2:2021-06-50
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dinmukhamed Kelesbayev & Kundyz Myrzabekkyzy & Artur Bolganbayev & Sabit Baimaganbetov, 2022. "The Effects of the Oil Price Shock on Inflation: The Case of Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 477-481, May.
    2. Olga Miroshnichenko & Elena Iakovleva & Natalia Voronova, 2022. "Banking Sector Profitability: Does Household Income Matter?," Sustainability, MDPI, vol. 14(6), pages 1-19, March.
    3. Artur Bolganbayev & Baltaim Sabenova & Gulmira Mombekova & Gulnur Sultankhanova & Tazhibayeva Raikhan Musamatovna, 2022. "The Effect of Electricity Generation, Thermal Energy Production, Fixed Capital Investment, and Consumer Price Index on Economic Growth in Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 67-72, November.
    4. Dinmukhamed Kelesbayev & Kundyz Myrzabekkyzy & Artur Bolganbayev & Sabit Baimaganbetov, 2022. "The Impact of Oil Prices on the Stock Market and Real Exchange Rate: The Case of Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 163-168.
    5. Kundyz Myrzabekkyzy & Bektur Keneshbayev & Dina I. Razakova & Indira Kenzhebekova & Zhansulu Pirmanova, 2022. "Analysis of Causality Relationship Between the Economic Growth and the Energy Production and Technological Investments in Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 123-126, November.

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    More about this item

    Keywords

    Countries Bordering the Caspian Sea; Oil Prices; Economic Growth; Panel Cointegration Test;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P42 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Productive Enterprises; Factor and Product Markets; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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