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The Impact of Oil Price on Economic Growth in Middle-Income Oil-Importing Countries: A Non-Linear Panel ARDL Approach

Author

Listed:
  • Akinsola Motunrayo O.

    (University of South Africa, Department of Economics, P.O Box 392, UNISA, 0003, Pretoria, South Africa)

  • Odhiambo N. M.

    (University of South Africa, Department of Economics, P.O Box 392, UNISA, 0003, Pretoria, South Africa)

Abstract

In this study, the impact of the crude oil price on economic growth is investigated in seven middle-income oil-importing countries in sub-Saharan Africa (SSA), namely Botswana, Kenya, Mauritania, Mauritius, Namibia, South Africa, and Zambia. The estimation is based on both linear and non-linear panel autoregressive distributive lag (panel ARDL) models. The real oil price is decomposed into negative oil price shock and positive oil price shock in order to examine the non-linear impact of oil price on economic growth. Using an annual dataset from 1990 to 2018, it was found that in the symmetric model the oil price has a positive and significant impact on economic growth in the long run. The short-run estimates, however, show that the oil price has no significant impact on economic growth. The overall results from the asymmetric model also show that there is a non-linear relationship between oil price and economic growth in the studied countries.

Suggested Citation

  • Akinsola Motunrayo O. & Odhiambo N. M., 2022. "The Impact of Oil Price on Economic Growth in Middle-Income Oil-Importing Countries: A Non-Linear Panel ARDL Approach," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 10(1), pages 29-48, September.
    • Handle: RePEc:vrs:auseab:v:10:y:2022:i:1:p:29-48:n:8
    DOI: 10.2478/auseb-2022-0003
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    More about this item

    Keywords

    oil price; economic growth; middle-income countries; sub-Saharan Africa; panel asymmetric effects;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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