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

Akinsola Motunrayo O. () and Nicholas Odhiambo
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Akinsola Motunrayo O.: University of South Africa, Department of Economics, P.O Box 392, UNISA, 0003, Pretoria, South Africa

Acta Universitatis Sapientiae, Economics and Business, 2022, vol. 10, issue 1, 29-48

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.

Keywords: oil price; economic growth; middle-income countries; sub-Saharan Africa; panel asymmetric effects (search for similar items in EconPapers)
JEL-codes: C33 N17 O55 Q43 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:auseab:v:10:y:2022:i:1:p:29-48:n:8

DOI: 10.2478/auseb-2022-0003

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