IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/v15y2025i2id18284.html

Oil Price Shocks and Economic Growth in Oil Exporting Countries: A Case Study of a Small Open Economy

Author

Listed:
  • Fadare, Samuel O.

    (Nile University of Nigeria, Nigeria)

  • Oladipo, Olajide

    (Nile University of Nigeria, Nigeria)

  • Agama, Emomotimi

    (Securities and Exchange Commission, Nigeria)

Abstract

This study investigates the relationship between oil price shocks and economic growth in a small open economy which is also a prominent oil-exporting economy. The research employs annual time series data from 1996 to 2022 and error correction method (ECM) to analyze the impact of variations in oil prices on Nigeria's economic performance. The study unraveled the nuanced mechanisms driving the interaction between oil price volatility and economic performance in our case, small open economy, Nigeria. In addition, the research explores the mechanisms through which oil price shocks transmit to the broader economy, considering factors such as government policies, institutional frameworks, and the structure of Nigeria's oil-dependent economy. Findings revealed that in the short-run as well as long-run, oil price volatilities, investments, and oil revenues have a negative effect on economic growth. Indeed investments, whether lagged by 1-year or not lagged at all, has a negative effect on economic growth in Nigeria. The study will equip policymakers and other stakeholders' valuable knowledge to formulate more robust policies aimed at mitigating the adverse impacts of oil price volatility on Nigeria's economic growth prospects and foster sustainable economic development strategy in Nigeria.

Suggested Citation

  • Fadare, Samuel O. & Oladipo, Olajide & Agama, Emomotimi, 2025. "Oil Price Shocks and Economic Growth in Oil Exporting Countries: A Case Study of a Small Open Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 15(2), pages 260-269, February.
    • Handle: RePEc:eco:journ2:v:15:y:2025:i:2:id:18284
    DOI: 10.32479/ijeep.18284
    as

    Download full text from publisher

    File URL: https://econjournals.com/index.php/ijeep/article/download/18284/8601
    Download Restriction: no
    File URL: https://libkey.io/10.32479/ijeep.18284?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:v:15:y:2025:i:2:id:18284. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Monica Sinhat (email available below). General contact details of provider: https://econjournals.com/index.php/ijeep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.