Ownership structure of oil revenues: Political institutions and financial markets in oil-producing countries

Jabir Ibrahim Mohammed, Vera Ogeh Fiador, Amin Karimu and Joshua Yindenaba Abor

Journal of Multinational Financial Management, 2022, vol. 66, issue C

Abstract: This study examines the impact of the ownership structure of oil revenues on financial markets and institutions, and the intermediating role of political institutions. Using the fixed-effects model and GMM for robustness, we analyse data from 82 oil-producing countries. We find several key results. Firstly, government ownership of oil revenues undermines the efficiency of financial institutions when the quality of political institutions is weak, but enhances their efficiency when political institutions are strong. Secondly, the impact of private ownership of oil revenues is negative on the depth of and access to financial institutions when the quality of political institutions is weak, but positive when political institutions are strong. We observe similar threshold effects for the depth of and access to financial markets in the subsample of developing countries. We conclude that oil-producing countries need solid political institutions to benefit from oil wealth and to boost financial development.

Keywords: Ownership structure; Government oil revenues; Private oil revenues; Political institutions; Financial institutions and markets; International oil companies (search for similar items in EconPapers)
JEL-codes: N2 P16 Q32 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:66:y:2022:i:c:s1042444x22000317

DOI: 10.1016/j.mulfin.2022.100760

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