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Dutch Disease effect of Oil Price on Agriculture Sector: Evidence from Panel Cointegration of Oil Exporting Countries

Author

Listed:
  • Rizgar Abdlkarim Abdlaziz

    (Department of Business and Administration, Darbandikhan Technical Institute, Sulaimani Polytechnic University, Darbandikhan, Iraq,)

  • N. A. M. Naseem

    (Department of Economics, Faculty of Economics and Management, Universiti Putra Malaysia, 43400 UPM Serdang, Selangor, Malaysia)

  • Ly Slesman

    (Centre for Advanced Research (CARe), Universiti Brunei Darussalam, Brunei)

Abstract

This study aims to investigate the long-run relationship between oil price and value-added share of GDP of agriculture in 25 oil-exporting countries. We use the panel heterogeneous cointegration test and fully modified OLS (FMOLS), dynamic (OLS) and pooled mean group (PMG) methods to examine the long-run effect of real oil price and real exchange rate on agriculture. The result of the Pedroni cointegration exposes the long-run relationship between the variables under study. Panel cointegration estimators show the negative and significant effect of oil price and exchange rate on agriculture value added. These results indicate the existence of the Dutch disease and de-agriculturalization in oil-exporting economies. The present study contributes to existing literature that concentrates on the Dutch disease and di-agriculturalization by analyzing the effect of real oil price and real exchange rate on the agricultural sector in the long- and short-run in developing oil-exporting countries.

Suggested Citation

  • Rizgar Abdlkarim Abdlaziz & N. A. M. Naseem & Ly Slesman, 2018. "Dutch Disease effect of Oil Price on Agriculture Sector: Evidence from Panel Cointegration of Oil Exporting Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 241-250.
    • Handle: RePEc:eco:journ2:2018-05-30
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    Citations

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    Cited by:

    1. Sugra Ingilab Humbatova & Galib Bahram Hajiyev & Leyla Zakir Aliyeva & Natig Gadim-Oglu Hajiev, 2023. "The Impact of Oil Exports on Imports of Agricultural Machinery and Equipment," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 335-351, January.
    2. Edouard Mien & Michaël Goujon, 2022. "40 Years of Dutch Disease Literature: Lessons for Developing Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(3), pages 351-383, September.
    3. Dorinet, Elizavetta & Jouvet, Pierre-André & Wolfersberger, Julien, 2021. "Is the agricultural sector cursed too? Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 140(C).
    4. Svein Oskar Lauvsnes, 2021. "Dutch disease in the Norwegian agricultural sector," Review of Agricultural, Food and Environmental Studies, Springer, vol. 102(1), pages 25-57, March.
    5. Chopra, Ritika & Magazzino, Cosimo & Shah, Muhammad Ibrahim & Sharma, Gagan Deep & Rao, Amar & Shahzad, Umer, 2022. "The role of renewable energy and natural resources for sustainable agriculture in ASEAN countries: Do carbon emissions and deforestation affect agriculture productivity?," Resources Policy, Elsevier, vol. 76(C).
    6. Taiwo Akinlo, 2024. "Oil price and real sector in oil-importing countries: an asymmetric analysis of sub-Saharan Africa," Economic Change and Restructuring, Springer, vol. 57(1), pages 1-27, February.
    7. Dorinet, Elizavetta & Jouvet, Pierre-André & Wolfersberger, Julien, 2021. "Is the agricultural sector cursed too? Evidence from Sub-Saharan Africa," World Development, Elsevier, vol. 140(C).
    8. Lauvsnes, Svein Oskar, 2021. "Dutch disease in the Norwegian agricultural sector Exploring the oil price–food security nexus," Review of Agricultural, Food and Environmental Studies, Institut National de la Recherche Agronomique (INRA), vol. 102(1), January.
    9. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).
    10. Oyetoun Dunmola Amao & Michael Akwasi Antwi & Oluwaseun Samuel Oduniyi & Timothy Olukunle Oni & Theresa Tendai Rubhara, 2021. "Performance of Agricultural Export Products on Economic Growth in Nigeria," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 11(1), pages 47-52, March.
    11. Alssadek, Marwan & Benhin, James, 2021. "Oil boom, exchange rate and sectoral output: An empirical analysis of Dutch disease in oil-rich countries," Resources Policy, Elsevier, vol. 74(C).
    12. Umar Tijjani Babuga & Niaz Ahmad Mohd Naseem, 2021. "Asymmetric Effect of Oil Price Change on Inflation: Evidence from Sub Saharan Africa Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 448-458.
    13. Sugra Ingilab Humbatova & Mubariz Mammadli Malik & Valiyev Jabrayil Khalil & Natig Gadim-Oglu Hajiev, 2022. "Impact of Oil Exports on Imports of Food and Agricultural Products," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 135-150, May.
    14. Udemba, Edmund Ntom & Yalçıntaş, Selin, 2022. "Unveiling the symptoms of Dutch disease: A comparative and sustainable analysis of two oil-rich countries," Resources Policy, Elsevier, vol. 79(C).
    15. Yang, Jinxuan & Rizvi, Syed Kumail Abbas & Tan, Zhixiong & Umar, Muhammad & Koondhar, Mansoor Ahmed, 2021. "The competing role of natural gas and oil as fossil fuel and the non-linear dynamics of resource curse in Russia," Resources Policy, Elsevier, vol. 72(C).

    More about this item

    Keywords

    oil price; agriculture; Dutch disease; panel cointegration.;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • Z3 - Other Special Topics - - Tourism Economics

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