Investigating the Asymmetric Effect of Oil Price on the Economic Growth in Malaysia: Applying Augmented ARDL and Nonlinear ARDL Techniques

Karunanithi Kriskkumar, Niaz Ahmad Mohd Naseem and W.N.w Azman-Saini

SAGE Open, 2022, vol. 12, issue 1, 21582440221079936

Abstract: This paper attempts to investigate if the effect of oil price on growth is asymmetrical for Malaysia, a small-open-dynamic oil-exporting country, over a period from 1981 to 2017. The empirical method employed in this study is the augmented autoregressive distributed lag model (ARDL) bound test approach and the recent innovative nonlinear autoregressive distributed lag (NARDL) model. Results suggest that neglecting nonlinearities can lead to misleading results. More precisely, the result reveals that adjustments in the price of oil influence Malaysia’s economic growth asymmetrically. An increase and decrease in the price of oil strengthen the economic growth of Malaysia, demonstrating Malaysia’s ability to be both an oil-producing country and a trading nation. These results strongly imply that Malaysia is able to take advantage of changes in the oil price efficiently.

Keywords: economic growth; oil price shocks; oil exporting; asymmetric effect; Malaysia (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/21582440221079936 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:12:y:2022:i:1:p:21582440221079936

DOI: 10.1177/21582440221079936

Access Statistics for this article

More articles in SAGE Open
Bibliographic data for series maintained by SAGE Publications ().