Nonlinear effects of crude oil dependency on food prices in China: Evidence from quantile-on-quantile approach
The repercussions of disruptions in the global crude oil market have a substantial influence on economies worldwide. Oil shocks are considered important estimators of many economic variables. The current research examines the effects of oil price shocks on food prices in China using monthly data fr...
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| Format: | Article |
| Language: | English |
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Vilnius Gediminas Technical University
2023-11-01
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| Series: | Journal of Business Economics and Management |
| Subjects: | |
| Online Access: | https://jau.vgtu.lt/index.php/JBEM/article/view/20192 |
| _version_ | 1797633569327153152 |
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| author | Ying Yu Chuqi Peng Muhammad Zakaria Hamid Mahmood Samia Khalid |
| author_facet | Ying Yu Chuqi Peng Muhammad Zakaria Hamid Mahmood Samia Khalid |
| author_sort | Ying Yu |
| collection | DOAJ |
| description |
The repercussions of disruptions in the global crude oil market have a substantial influence on economies worldwide. Oil shocks are considered important estimators of many economic variables. The current research examines the effects of oil price shocks on food prices in China using monthly data from 2000M1 to 2021M12. The estimation is done using the Quantile on Quantile (QQ) estimation technique. The BDS test is used to test nonlinear dependence in variables. The results of this test confirm the presence of nonlinear dependence in variables. The estimated results of the QQ technique suggest a strong association between oil prices and food prices nexus in China with significant disparities across the quantiles. The lower and medium quantiles show a poor negative effect of crude oil prices on food prices. Nevertheless, it has been shown that there exists a strong positive correlation in the higher quantiles of the distribution, which suggests that an increase in global oil prices directly impacts the costs of food. The outcome of the study offers significant policy recommendations aimed at mitigating the detrimental impact of oil prices on food prices in China.
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| first_indexed | 2024-03-11T11:55:43Z |
| format | Article |
| id | doaj.art-4fc1d9f7b3764a35b4e5ad9c56ebebc1 |
| institution | Directory Open Access Journal |
| issn | 1611-1699 2029-4433 |
| language | English |
| last_indexed | 2024-03-11T11:55:43Z |
| publishDate | 2023-11-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | Journal of Business Economics and Management |
| spelling | doaj.art-4fc1d9f7b3764a35b4e5ad9c56ebebc12023-11-08T16:21:58ZengVilnius Gediminas Technical UniversityJournal of Business Economics and Management1611-16992029-44332023-11-0124410.3846/jbem.2023.20192Nonlinear effects of crude oil dependency on food prices in China: Evidence from quantile-on-quantile approachYing Yu0Chuqi Peng1Muhammad Zakaria2Hamid Mahmood3Samia Khalid4Antai College of Economics & Management, Shanghai Jiao Tong University, Shanghai, P.R. ChinaSchool of Economics and Management, Baotou Teachers’ College, Baotou, Inner Mongolia, China Department of Economics, COMSATS University Islamabad Campus, Islamabad, PakistanSchool of Economics and Finance, Xi’an Jiaotong University, Xi’an, Shaanxi, P.R. ChinaSchool of Economics and Finance, Xi’an Jiaotong University, Xi’an, Shaanxi, P.R. China The repercussions of disruptions in the global crude oil market have a substantial influence on economies worldwide. Oil shocks are considered important estimators of many economic variables. The current research examines the effects of oil price shocks on food prices in China using monthly data from 2000M1 to 2021M12. The estimation is done using the Quantile on Quantile (QQ) estimation technique. The BDS test is used to test nonlinear dependence in variables. The results of this test confirm the presence of nonlinear dependence in variables. The estimated results of the QQ technique suggest a strong association between oil prices and food prices nexus in China with significant disparities across the quantiles. The lower and medium quantiles show a poor negative effect of crude oil prices on food prices. Nevertheless, it has been shown that there exists a strong positive correlation in the higher quantiles of the distribution, which suggests that an increase in global oil prices directly impacts the costs of food. The outcome of the study offers significant policy recommendations aimed at mitigating the detrimental impact of oil prices on food prices in China. https://jau.vgtu.lt/index.php/JBEM/article/view/20192oil price shocksfood pricesBDS testquantile-on-quantile regressionChina |
| spellingShingle | Ying Yu Chuqi Peng Muhammad Zakaria Hamid Mahmood Samia Khalid Nonlinear effects of crude oil dependency on food prices in China: Evidence from quantile-on-quantile approach Journal of Business Economics and Management oil price shocks food prices BDS test quantile-on-quantile regression China |
| title | Nonlinear effects of crude oil dependency on food prices in China: Evidence from quantile-on-quantile approach |
| title_full | Nonlinear effects of crude oil dependency on food prices in China: Evidence from quantile-on-quantile approach |
| title_fullStr | Nonlinear effects of crude oil dependency on food prices in China: Evidence from quantile-on-quantile approach |
| title_full_unstemmed | Nonlinear effects of crude oil dependency on food prices in China: Evidence from quantile-on-quantile approach |
| title_short | Nonlinear effects of crude oil dependency on food prices in China: Evidence from quantile-on-quantile approach |
| title_sort | nonlinear effects of crude oil dependency on food prices in china evidence from quantile on quantile approach |
| topic | oil price shocks food prices BDS test quantile-on-quantile regression China |
| url | https://jau.vgtu.lt/index.php/JBEM/article/view/20192 |
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