Analysis of Oil Price Effect on Economic Growth of ASEAN Net Oil Exporters

Karunanithi Kriskkumar and Niaz Ahmad Mohd Naseem
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Karunanithi Kriskkumar: Department of Economics, Universiti Putra Malaysia, Serdang 43400, Selangor Darul Ehsan, Malaysia
Niaz Ahmad Mohd Naseem: Department of Economics, Universiti Putra Malaysia, Serdang 43400, Selangor Darul Ehsan, Malaysia

Energies, 2019, vol. 12, issue 17, 1-19

Abstract: In this paper, the linear and nonlinear effects of oil price on growth for Association of Southeast Asian Nations (ASEAN)—3 net oil-exporting countries, namely Brunei, Malaysia and Vietnam, are investigated. The empirical analysis applies the augmented autoregressive distributed lag model (ARDL) bound test approach and the nonlinear autoregressive distributed lag model (NARDL) methodology over the period of 1979 to 2017. Evidence suggests that ignoring nonlinearities may lead to misleading results. Specifically, results reveal that the effect of oil price is asymmetric for the case of Brunei, while the effect oil price is deemed insignificant for the case of Malaysia and Vietnam, both linear and nonlinear model. Brunei’s high dependency on oil revenue makes it susceptible to negative oil price shock. This suggests that oil price still plays a significant role as the main driver of economic progress for Brunei.

Keywords: oil price; asymmetric; ASEAN; augmented ARDL; nonlinear ARDL (NARDL); economic growth (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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