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Panel Analysis of Fuel-Export Dependence, Dutch Disease, and Manufacturing Performance in Oil-Producing Economies

Author

Listed:
  • Fred Ani

    (Energy Economics Department, Emerald Energy Institute, University of Port Harcourt, Nigeria)

  • Uju Vivian Amah

    (Entrepreneurship Education Department, School of Business Education, Federal College of Education (Tech) Umunze, Anambra state, Nigeria)

Abstract

Oil-producing economies continue to face persistent concerns over manufacturing decline, macroeconomic vulnerability, and weak industrial diversification despite substantial petroleum revenues. This study examined the effect of fuel-export dependence on manufacturing performance in selected oil-producing economies within the framework of the Dutch Disease hypothesis. Using annual panel data for ten oil-producing countries from 2010 to 2024, the study employed descriptive statistics, correlation analysis, panel unit-root and cointegration tests, pooled OLS, Fixed and Random Effects estimations, Hausman specification testing, Driscoll–Kraay robust estimation, and Panel ARDL error-correction modelling. The results showed that fuel exports exerted a significant negative effect on manufacturing value added, with the Driscoll–Kraay robust estimate confirming that higher fuel-export dependence reduces manufacturing performance. Among other findings, GDP growth and gross capital formation positively influenced manufacturing value added, while foreign direct investment became statistically insignificant after robust correction. The study concludes that excessive petroleum-export dependence constrains industrial development and reinforces Dutch Disease dynamics in oil- producing economies. It recommends that oil-producing countries should strengthen non-oil industrial diversification policies, among other measures, to reduce structural dependence on fuel exports and promote sustainable manufacturing growth.

Suggested Citation

  • Fred Ani & Uju Vivian Amah, 2026. "Panel Analysis of Fuel-Export Dependence, Dutch Disease, and Manufacturing Performance in Oil-Producing Economies," Post-Print hal-05698920, HAL.
    • Handle: RePEc:hal:journl:hal-05698920
    DOI: 10.59324/ejmeb.2026.3(4).10
    as

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