Oil exports and non-oil exports: Dutch disease effects in the Organization of Petroleum Exporting Countries (OPEC)

Abstract

Purpose

The purpose of this paper is to examine the dynamic relationship between oil exports, non-oil exports, imports and economic growth in the Organization of Petroleum Exporting Countries (OPEC), covering the period 1972-2013 by using panel data analysis.

Design/methodology/approach

The results from the dynamic panel data methods are as follows: there exists the cross-sectional dependence on each variable. According to the cross-sectionally augmented panel unit root tests, all variables are stationary at the first difference. Westerlund and Edgerton (2007) LM Bootstrap cointegration test shows that there is a long-term relationship between variables.

Findings

The results obtained by the Common Correlated Effects (CCE) estimator indicate that the increase in oil exports has a positive impact on the GDP of all countries, while the increase in oil exports has a negative impact on the non-oil exports of some countries.

Originality/value

In this study, the relationship between oil exports, economic growth, imports and non-oil exports of the 12 OPEC member countries is tested by considering the cross-sectional dependence between 1972 and 2013. In the study, the authors found a positive relationship as a result of researching the impact of oil exports on economic growth in the frame of CCE panel estimations results.

Citation

Karamelikli, H., Akalin, G. and Arslan, U. (2017), "Oil exports and non-oil exports: Dutch disease effects in the Organization of Petroleum Exporting Countries (OPEC)", Journal of Economic Studies, Vol. 44 No. 4, pp. 540-551. https://doi.org/10.1108/JES-01-2016-0015