Social and economic drivers of national economic development: the case of OPEC countries
This paper examines the economic relationships between oil price volatility and socially-economic development of 14 Organization of the Petroleum Exporting Countries (OPEC) using the annual panel data for the period 1990–2014 obtained from the World Bank (WB) statistical data sets. Hausman specifica...
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LLC "CPC "Business Perspectives"
2018-11-01
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| Series: | Problems and Perspectives in Management |
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| Online Access: | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/11088/PPM_2018_04_Abaas.pdf |
| _version_ | 1818510582337241088 |
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| author | Mlaabdal Saady Mahmood Abaas Olena Chygryn Oleksandr Kubatko Tetyana Pimonenko |
| author_facet | Mlaabdal Saady Mahmood Abaas Olena Chygryn Oleksandr Kubatko Tetyana Pimonenko |
| author_sort | Mlaabdal Saady Mahmood Abaas |
| collection | DOAJ |
| description | This paper examines the economic relationships between oil price volatility and socially-economic development of 14 Organization of the Petroleum Exporting Countries (OPEC) using the annual panel data for the period 1990–2014 obtained from the World Bank (WB) statistical data sets. Hausman specification test has been performed to choose the method of panel data analysis, and the results were in favor of fixed effects estimation. The main findings indicate the direct relationship between economic growth and oil price volatility. The research supports the hypothesis that an increase in crude oil prices is positively related to GDP, and a 10% increase in oil prices correlates with 0.6-4% GDP improvements. Structural changes in employment in favor of service sector are negatively correlated with GDP per capita. Changes in GDP structure in favor of oil rents on 10% lead to the shrinking of GDP on 1%. Life expectancy at birth, as an indirect indicator of health, positively influences the economic growth indicators and an improvement in life expectancy on one percentage leads on average to 1% growth in GDP and 0.5-1.33% growth in GDP per capita. Energy efficiency improvements are positive drivers of GDP values at OPEC, and our findings suggest that a 10% increase at GDP per unit of energy use leads to 3% increase of GDP itself. The study recommends investing in energy efficiency, human capital, and capital formation to guarantee long-run economic development and prosperity of OPEC counties. |
| first_indexed | 2024-12-10T23:21:53Z |
| format | Article |
| id | doaj.art-3dee116db8594cf09c2c52330fa37c13 |
| institution | Directory Open Access Journal |
| issn | 1727-7051 1810-5467 |
| language | English |
| last_indexed | 2024-12-10T23:21:53Z |
| publishDate | 2018-11-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Problems and Perspectives in Management |
| spelling | doaj.art-3dee116db8594cf09c2c52330fa37c132022-12-22T01:29:42ZengLLC "CPC "Business Perspectives"Problems and Perspectives in Management1727-70511810-54672018-11-0116415516810.21511/ppm.16(4).2018.1411088Social and economic drivers of national economic development: the case of OPEC countriesMlaabdal Saady Mahmood Abaas0Olena Chygryn1Oleksandr Kubatko2Tetyana Pimonenko3Manager, Public transport company Al-Fajr Al-Badea, Iraq, Mosul, Ph.D. Student, Sumy State UniversityPh.D., Associate Professor, Department of Economics, Entrepreneurship and Business Administration, Sumy State UniversityDoctor in Economics, Associate Professor, Department of Economics, Entrepreneurship and Business Administration, Sumy State UniversityPh.D., Associate Professor, Department of Economics, Entrepreneurship and Business Administration, Sumy State UniversityThis paper examines the economic relationships between oil price volatility and socially-economic development of 14 Organization of the Petroleum Exporting Countries (OPEC) using the annual panel data for the period 1990–2014 obtained from the World Bank (WB) statistical data sets. Hausman specification test has been performed to choose the method of panel data analysis, and the results were in favor of fixed effects estimation. The main findings indicate the direct relationship between economic growth and oil price volatility. The research supports the hypothesis that an increase in crude oil prices is positively related to GDP, and a 10% increase in oil prices correlates with 0.6-4% GDP improvements. Structural changes in employment in favor of service sector are negatively correlated with GDP per capita. Changes in GDP structure in favor of oil rents on 10% lead to the shrinking of GDP on 1%. Life expectancy at birth, as an indirect indicator of health, positively influences the economic growth indicators and an improvement in life expectancy on one percentage leads on average to 1% growth in GDP and 0.5-1.33% growth in GDP per capita. Energy efficiency improvements are positive drivers of GDP values at OPEC, and our findings suggest that a 10% increase at GDP per unit of energy use leads to 3% increase of GDP itself. The study recommends investing in energy efficiency, human capital, and capital formation to guarantee long-run economic development and prosperity of OPEC counties.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/11088/PPM_2018_04_Abaas.pdfeconomic developmentlife expectancyoil priceOPEC |
| spellingShingle | Mlaabdal Saady Mahmood Abaas Olena Chygryn Oleksandr Kubatko Tetyana Pimonenko Social and economic drivers of national economic development: the case of OPEC countries Problems and Perspectives in Management economic development life expectancy oil price OPEC |
| title | Social and economic drivers of national economic development: the case of OPEC countries |
| title_full | Social and economic drivers of national economic development: the case of OPEC countries |
| title_fullStr | Social and economic drivers of national economic development: the case of OPEC countries |
| title_full_unstemmed | Social and economic drivers of national economic development: the case of OPEC countries |
| title_short | Social and economic drivers of national economic development: the case of OPEC countries |
| title_sort | social and economic drivers of national economic development the case of opec countries |
| topic | economic development life expectancy oil price OPEC |
| url | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/11088/PPM_2018_04_Abaas.pdf |
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