IDEAS home Printed from https://ideas.repec.org/a/lrc/larijb/v6y2016i12p13-24.html
   My bibliography  Save this article

The Effects of Oil Price Volatility on the Economic Sectors of Libya

Author

Listed:
  • Nagmi M. Moftah Aimer

    (Social Sciences Institute, Department of Business Administration, Kastamonu University, Turkey)

Abstract

Fluctuations in oil price and its impact on economic development is an important issue facing a growing number of world economies. A simple changes in oil prices lead to negative or positive effects on all the economic sectors. This paper seeks to investigate the impact of oil price volatility on economic sectors in the Libyan economy context on the basis of annual data spanning from 1968-2012. The Johansen based Co-integration technique is applied to examine the sensitivity of economic sectors to volatility in oil prices in the long-run. And the short-run relationship is tested by Vector Error Correction Model. Through examining the results, that there is a long-term relationship of oil prices on the agriculture, construction, manufacturing and transport sectors. Finally, this study concludes that increases in oil price did not significantly affect the manufacturing sector in aggregate terms. Moreover, the negative impact on the sector of manufacturing and agriculture. Thus, this study has a significant impact in the Libyan economy in policy development on oil prices. The Libyan government needs to control the price to make sure that price volatility will not harm the manufacturing, agriculture, construction and transport sectors.

Suggested Citation

  • Nagmi M. Moftah Aimer, 2016. "The Effects of Oil Price Volatility on the Economic Sectors of Libya," International Journal of Business and Social Research, LAR Center Press, vol. 6(12), pages 13-24, December.
    • Handle: RePEc:lrc:larijb:v:6:y:2016:i:12:p:13-24
    as

    Download full text from publisher

    File URL: http://thejournalofbusiness.org/index.php/site/article/view/1017/642
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Muhammad Faraz Riaz & Maqbool Hussain Sial & Samia Nasreen, 2016. "Impact of Oil Price Volatility on Manufacturing Production of Pakistan," Bulletin of Energy Economics (BEE), The Economics and Social Development Organization (TESDO), vol. 4(1), pages 23-34, March.
    2. Francesco Guidi, 2010. "The Economic Effects of Oil Prices Shocks on the UK Manufacturing and Services Sectors," The IUP Journal of Applied Economics, IUP Publications, vol. 0(4), pages 5-34, October.
    3. Farhad Taghizadeh-Hesary & Ehsan Rasoulinezhad & Yoshikazu Kobayashi, 2016. "Oil price fluctuations and oil consuming sectors: An empirical analysis of Japan," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2016(2), pages 33-51.
    4. Torul Orhan & Alper C. Emre, 2010. "Asymmetric Effects of Oil Prices on the Manufacturing Sector in Turkey," Review of Middle East Economics and Finance, De Gruyter, vol. 6(1), pages 90-105, July.
    5. Mohd Shahidan Shaari & Tan Lee Pei & Hafizah Abdul Rahim, 2013. "Effects of Oil Price Shocks on the Economic Sectors in Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 3(4), pages 360-366.
    6. Granger, C. W. J., 1980. "Testing for causality : A personal viewpoint," Journal of Economic Dynamics and Control, Elsevier, vol. 2(1), pages 329-352, May.
    7. Ulusoy, Tolga & Keskin, Mustafa & Shirvani, Ayoub & Deviren, Bayram & Kantar, Ersin & Çaǧrı Dönmez, Cem, 2012. "Complexity of major UK companies between 2006 and 2010: Hierarchical structure method approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 391(21), pages 5121-5131.
    8. Mr. Aasim M. Husain & Mr. Rabah Arezki & Mr. Peter Breuer & Mr. V. Haksar & Mr. Thomas Helbling & Mr. Paulo A Medas & Mr. Martin Sommer, 2015. "Global Implications of Lower Oil Prices," IMF Staff Discussion Notes 2015/015, International Monetary Fund.
    9. Aasim M. Husain & Rabah Arezki & Peter Breuer & Vikram Haksar & Thomas Helbling & Paulo A Medas & Martin Sommer, 2015. "Global Implications of Lower Oil Prices," IMF Staff Discussion Notes 15/15, International Monetary Fund.
    10. Mohsen Mehrara & Mehdi Sarem, 2009. "Effects of oil price shocks on industrial production: evidence from some oil-exporting countries," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 33(3-4), pages 170-183, September.
    11. Ichiro Fukunaga & Naohisa Hirakata & Nao Sudo, 2009. "The Effects of Oil Price Changes on the Industry-Level Production and Prices in the U.S. and Japan," IMES Discussion Paper Series 09-E-24, Institute for Monetary and Economic Studies, Bank of Japan.
    12. Girijasankar Mallik & Anis Chowdhury, 2011. "Effect of inflation uncertainty, output uncertainty and oil price on inflation and growth in Australia," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 38(4), pages 414-429, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Munaf Marza* & Sundus Jasim Shaaibith & Shatha Salem Daly, 2018. "Impact of Oil Price Fluctuations on Human Development: A Standard Study of Iraq," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 396-399:5.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nagmi M. Moftah Aimer, 2016. "The Effects of Oil Price Volatility on the Economic Sectors of Libya," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 6(12), pages 13-24, December.
    2. Nagmi M. Moftah Aimer, 2016. "Crude Oil Prices and Economic Development in Libya," Energy Economics Letters, Asian Economic and Social Society, vol. 3(3), pages 30-41, September.
    3. Y lmaz BAYAR & Cuneyt KILIC, 2014. "Effects of Oil and Natural Gas Prices on Industrial Production in the Eurozone Member Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 238-247.
    4. Beckmann, Joscha & Czudaj, Robert L. & Arora, Vipin, 2020. "The relationship between oil prices and exchange rates: Revisiting theory and evidence," Energy Economics, Elsevier, vol. 88(C).
    5. Joscha Beckmann & Mariarosaria Comunale, 2020. "Exchange rate fluctuations and the financial channel in emerging economies," Bank of Lithuania Working Paper Series 83, Bank of Lithuania.
    6. Mr. Alberto Behar & Robert A Ritz, 2016. "An Analysis of OPEC’s Strategic Actions, US Shale Growth and the 2014 Oil Price Crash," IMF Working Papers 2016/131, International Monetary Fund.
    7. Behar, Alberto & Ritz, Robert A., 2017. "OPEC vs US shale: Analyzing the shift to a market-share strategy," Energy Economics, Elsevier, vol. 63(C), pages 185-198.
    8. Kamiar Mohaddes & Mehdi Raissi, 2019. "The US oil supply revolution and the global economy," Empirical Economics, Springer, vol. 57(5), pages 1515-1546, November.
    9. Nasir, Muhammad Ali & Al-Emadi, Ahmed Abdulsalam & Shahbaz, Muhammad & Hammoudeh, Shawkat, 2019. "Importance of oil shocks and the GCC macroeconomy: A structural VAR analysis," Resources Policy, Elsevier, vol. 61(C), pages 166-179.
    10. Yao Axel Ehouman, 2020. "Do oil-market shocks drive global liquidity?," EconomiX Working Papers 2020-33, University of Paris Nanterre, EconomiX.
    11. Mazlan, Zuhry & Masih, Mansur, 2018. "Causality between domestic fuel price and economic sectors: evidence from Malaysia," MPRA Paper 110682, University Library of Munich, Germany.
    12. Farhan Ahmed & Muhammad Osama Daudpota & Muhammad Kashif, 2017. "Oil Price Shocks And Industry Level Production Using Vector Autoregression: Empirical Evidence From Pakistan," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 11(3), pages 13-25.
    13. Pym Manopimoke & Wanicha Direkudomsak, 2015. "Thai Inflation Dynamics in a Globalized Economy," PIER Discussion Papers 11., Puey Ungphakorn Institute for Economic Research, revised Nov 2015.
    14. Ansgar Belke & Christian Dreger & Irina Dubova, 2019. "On the exposure of the BRIC countries to global economic shocks," The World Economy, Wiley Blackwell, vol. 42(1), pages 122-142, January.
    15. Maghyereh, Aktham & Abdoh, Hussein, 2021. "The effect of structural oil shocks on bank systemic risk in the GCC countries," Energy Economics, Elsevier, vol. 103(C).
    16. Ouyang, Zi-sheng & Liu, Meng-tian & Huang, Su-su & Yao, Ting, 2022. "Does the source of oil price shocks matter for the systemic risk?," Energy Economics, Elsevier, vol. 109(C).
    17. Monica Dudian & Mihaela Mosora & Cosmin Mosora & Stefanija Birova, 2017. "Oil Price and Economic Resilience. Romania’s Case," Sustainability, MDPI, vol. 9(2), pages 1-8, February.
    18. Alberto Behar & Armand Fouejieu, 2018. "External adjustment in oil exporters: The role of fiscal policy and the exchange rate," The World Economy, Wiley Blackwell, vol. 41(3), pages 926-957, March.
    19. Claudiu Tiberiu Albulescu, 2022. "Bank Financial Stability and International Oil Prices: Evidence from Listed Russian Public Banks," Eastern European Economics, Taylor & Francis Journals, vol. 60(3), pages 217-246, May.
    20. Figuerola-Ferretti, Isabel & McCrorie, J. Roderick & Paraskevopoulos, Ioannis, 2020. "Mild explosivity in recent crude oil prices," Energy Economics, Elsevier, vol. 87(C).

    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:lrc:larijb:v:6:y:2016:i:12:p:13-24. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Al Hossain (email available below). General contact details of provider: http://www.thejournalofbusiness.org .

    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.