Investigation of the Relationship between Oil Revenues and Gross Domestic Product with an Emphasis on Domestic Financial Markets (Case Study: Crude Oil Producing Countries
الموضوعات :
Seyed Jafar Mowlaei
1
,
Seyed Nematollah Mousavi
2
,
Abbas Aminifard
3
1 - Islamic Azad University, Marvdasht Branch, Marvdasht, Iran
2 - Islamic Azad University, Marvdasht Branch, Marvdasht, Iran
3 - Islamic Azad University, Shiraz Branch Shiraz, Iran
الکلمات المفتاحية: Oil revenues, economic growth, domestic financial markets, GMM,
ملخص المقالة :
Oil and its derivatives are among the non-renewable natural resources that constitute a significant portion of the annual income of several countries. A critical question that arises in this context is whether oil revenues can foster economic growth and development in oil-producing nations or not. Additionally, given the increasing importance of domestic financial markets in recent years, it is essential to examine these markets to better understand the relationship between economic growth and oil revenues. This study investigates the oil revenues and economic growth, with a particular focus on domestic financial markets in crude oil-producing countries, using the Generalized Method of Moments (GMM) method in the period from 2000 to 2020. The results showed that the lagged variable of gross domestic product per capita, the variable of domestic credit to the private sector by banks, and the variable of private credit by monetary banks and other financial institutions to GDP influence GDP per capita. Furthermore, the coefficient for the share of oil revenues in total income is negative, though not statistically significant. In other term, in oil-producing countries, an increase in oil revenues is associated with a decrease in GDP per capita, indicating that oil revenues have not been able to play a substantial role in the economic growth of these nations.
1. Abu Torabi, M. A., Fallahi, M. A., Salimifar, M., & Hosseini, S. M. (2013). The effect of oil revenues on the causal relationship between financial development and economic growth in Iran. Journal of Quantitative Economics, 10(2), 71-98.
2. Arellano, M., & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. The Review of Economic Studies, 58(2), 277-297.
3. Arezki, R., & vander Ploeg, F. (2011). Do natural resources depress income per-capita? Review Development Economics, 15, 504–521.
4. Baltagi, B.H. (2008). Econometric Analysis of Panel Data. Chichester: John Wiley & Sons Ltd.
5. Barik K. and S. Kaur (2020). Block-1 Issues in macroeconomics and national income accounting.
6. Beck, T. & R. Levine. (2002). Industry Growth and Capital Allocation: Does Having a Market- or Bank-Based System Matter?. Journal of Financial Economics, Elsevier, 64(2): 147-180.
7. Chow, Gregory C. (2004), Economic Reform and Growth in China, ANNALS OF ECONOMICS AND FINANCE 9, 123– 192.
8. Dash B.B. and S. Mukherjee (2015). “Political competition and human development: Evidence from the Indian states”. The Journal of Development Studies, 51(1), pp.1-14.
9. Demirguc-Kunt, A., E. Feyen & R. Levine. (2011). The Evolving Importance of Banks and Securities Markets. World Bank Policy Research Working Paper No. 5805, World Bank: Washington DC.
10. Durlauf, Steven N. (2009). \Poverty Traps and Appalachia," Manuscript Prepared For UKCPR Conference On \Appalachia And the Legacy of The War on Poverty," October .2009.
11. Ebrahimi, S. (2011). The effect of oil price shocks and exchange rate fluctuations and their resulting uncertainty on economic growth of selected countries. Journal of Business Research, 53, 83-105.
12. Farooq, A., Shahbaz, M., Arouri, M. & Teulon, F. (2013). Does corruption impede economic growth in Pakistan? Economic Modeling, 35(0), 622–633.
13. Fink, G., P. Haiss & S. Hristoforova. (2003). Bond Markets and Economic Growth. IEF Working Paper No. 49, Research Institute for European Affairs: Vienna.
14. Greene, W. H. (2003). Econometric Analysis. Delhi: Pearson Education.
15. Hosseini, M. (2008). Islamic governance and design of new financial instruments. In Proceedings of the First Islamic Economics and Development Conference (pp. 594-575). Ferdowsi University of Mashhad, Faculty of Administrative and Economic Sciences.
16. Jalili Kamjoo, S. P., & Safarian, H. R. (2019). The paths of oil revenues' impact on Iran's economic growth from the perspective of the natural resource curse. Journal of Strategic and Macroeconomic Policies, 8, 48-72.
17. Levine, R. (2002). Bank‐Based or Market‐Based Financial Systems: Which Is Better?. Journal of Financial Intermediation, 11(4): 398-428.
18. Liagat, M., Ashraf, A., Nisar, SH., and KHursheed, a. (2022). The Impact of Oil Price Inflation on Economic Growth of Oil Importing Economies: Empirical Evidence from Pakistan, Journal of Asian Finance, Economics and Business Vol 9 No 1 (2022) 0167–0176.
19. Mehregan, N., & Salmani, Y. (2014). Oil price fluctuations and sustainable economic growth: A case study of Iran and Japan. Quarterly Journal of Applied Economic Studies of Iran, 3(10), 107-125.
20. Morad beige, M., Hook Law, S. (2016). Growth volatility and resource curse: Does financial development dampen the oil shocks. Journal of resources policy, 48, 97-103.
21. Niazi Mohseni, M., Shahrestani, H., Hejbar Kiani, K., & Ghaffari, F. (2019). Study of the effect of monetary policy shocks and oil revenues on inflation and economic growth in Iran. Monetary Economics Research, 27(19), 29-46.
22. Nikpei Pesian, V., Hekmati Farid, S., Ansari Ardali, R., & Ghasemlou, M. (2012). Analysis of the spatial effect of oil revenues on economic growth of selected oil-exporting countries. Quarterly Journal of Economic Policy and Research, 1(1), 150-199.
23. Olayungbo, D.O. (2019). Effects of oil export revenue on economic growth in Nigeria: A time varying analysis of resource curse, Resources Policy, Volume 64, 101469.
24. Olayungbo, D.O., & Olayemi,O.F. (2018). Dynamic relationships among non-oil revenue, government spending and economic growth in an oil producing country: Evidence from Nigeria, Future Business Journal, Volume 4, Issue 2,246-260.
25. Rudari, S., Tehranchian, A., Zarei, P., & Kakaei, H. (2021). Evaluating the impact of oil revenue impulse on stock index in Iran: Application of Markov switching vector autoregression model. Quarterly Journal of Energy Economics Studies, 17(69), 23-55.
26. Salmani, Y. (2012). Comparing the impact of global oil market price fluctuations on the economies of OPEC and OECD countries (Bachelor's thesis). Arash University of Water and Power Industry, Faculty of Management and Economics.
27. Seifollahi, N., Emami, A., Amehad, H., & Takal, A. (2017). Study and comparison of the effect of oil price shocks asymmetry on economic growth: Selected oil exporting and importing countries using GMM method. Quarterly Journal of Financial Economics, 11(38), 55-75.
28. Seyed Mashhadi, P.-S., Ghalambaz, F., & Esfandiari, A. A. (2011). The importance of the oil industry in creating production and employment in the Iranian economy and its impact on other economic activities. Economic Growth and Development Research, 1(2), 133-161.
