The asymmetric effect of blue economy on growth sustainability in the oil-dependent countries: an empirical evidence from the non-linear approach

Continuous oil reserve depletion, coupled with environmental issues faced by oil-dependent countries, has generated an urgent necessity for critical economic diversification. The blue economy sector, which stands out among emerging sectors, has the potential to significantly boost sustainable growth. However, this area is underexplored. Therefore, this study seeks to investigate how Blue Economy [agriculture, forestry, and fishing, value added (AF); aquaculture production (AP); fishery production (FP)] affect long-term economic sustainability (GS) in African oil-dependent nations while examining the nature and direction of these effects through different economic conditions based on annual data spanning from 1980 to 2023. This research employs the Panel Nonlinear Autoregressive Distributed Lag model and the dynamic common correlated effect estimation for the analysis. Key findings show that the Blue Economy factors produce uneven results. Specifically, both FP and AP show positive and statistically significant results. An increase in AF typically reduces GS because natural capital sectors usually underperform in oil-rich countries, as oil revenues mask out investment in these countries. Yet the negative shocks of AF hinder GS through the restricted availability of capital. Whereas the positive shocks of AP create favorable conditions for food security and rural economic expansion; however, its corresponding negative shocks threaten GS. It further reveals that an increase in FP enhances GS, yet a decrease in FP hinders GS, as unsustainable practices in this sector are detrimental to economic performance. These results underscore the essentials of a Blue Economy to achieve long-term economic growth as they provide valuable insights for policymakers.