New Evidence of Oil Price Fluctuations and Manufacturing Output in Saudi Arabia, Kuwait and United Arab Emirates
Oil is used as an essential source of energy because it is one of the significant inputs of production especially in manufacturing sectors. This study employs symmetric and asymmetric Autoregressive Distributed Lag Model to explore oil price effect on manufacturing output over 1985-2017 in Saudi...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Johar Education Society
2020-03-01
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| Series: | Pakistan Journal of Commerce and Social Sciences |
| Subjects: | |
| Online Access: | http://www.jespk.net/publications/4389.pdf |
| _version_ | 1819018919152713728 |
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| author | Muhammad Faheem Mohamed Azali Lee Chin Nur Syazwani Mazlan |
| author_facet | Muhammad Faheem Mohamed Azali Lee Chin Nur Syazwani Mazlan |
| author_sort | Muhammad Faheem |
| collection | DOAJ |
| description | Oil is used as an essential source of energy because it is one of the significant inputs of
production especially in manufacturing sectors. This study employs symmetric and
asymmetric Autoregressive Distributed Lag Model to explore oil price effect on
manufacturing output over 1985-2017 in Saudi Arabia, Kuwait and United Arab
Emirates. The results of the linear model show that oil price effect manufacturing output
negatively in short-run and long-run. The detection of asymmetric behavior of oil price in
linear ARDL model show insufficient ability, and this study further estimated the model
through the non-linear model and decompose oil price into positive and negative changes.
In the non-linear model, the results show that negative oil price changes encourage
manufacturing output, while the positive oil price hurts manufacturing output. The study
also apply the Granger causality test, and results show one-way causality from oil price to
manufacturing output in Saudi Arabia and Kuwait. Based on the findings, the government
officials of these countries should take steps in shifting these economies from huge
extraction of oil and concentrate on manufacturing, and policymakers should understand
the linkage of oil price with manufacturing sector for diversification of their economy
and escape from Dutch Disease |
| first_indexed | 2024-12-21T03:27:04Z |
| format | Article |
| id | doaj.art-5171fabb45c14725881d0243bc1fcbf7 |
| institution | Directory Open Access Journal |
| issn | 1997-8553 2309-8619 |
| language | English |
| last_indexed | 2024-12-21T03:27:04Z |
| publishDate | 2020-03-01 |
| publisher | Johar Education Society |
| record_format | Article |
| series | Pakistan Journal of Commerce and Social Sciences |
| spelling | doaj.art-5171fabb45c14725881d0243bc1fcbf72022-12-21T19:17:34ZengJohar Education SocietyPakistan Journal of Commerce and Social Sciences1997-85532309-86192020-03-01141300333New Evidence of Oil Price Fluctuations and Manufacturing Output in Saudi Arabia, Kuwait and United Arab EmiratesMuhammad Faheem0Mohamed Azali1Lee Chin2Nur Syazwani Mazlan3Universiti Putra MalaysiUniversiti Putra MalaysiUniversiti Putra MalaysiUniversiti Putra MalaysiOil is used as an essential source of energy because it is one of the significant inputs of production especially in manufacturing sectors. This study employs symmetric and asymmetric Autoregressive Distributed Lag Model to explore oil price effect on manufacturing output over 1985-2017 in Saudi Arabia, Kuwait and United Arab Emirates. The results of the linear model show that oil price effect manufacturing output negatively in short-run and long-run. The detection of asymmetric behavior of oil price in linear ARDL model show insufficient ability, and this study further estimated the model through the non-linear model and decompose oil price into positive and negative changes. In the non-linear model, the results show that negative oil price changes encourage manufacturing output, while the positive oil price hurts manufacturing output. The study also apply the Granger causality test, and results show one-way causality from oil price to manufacturing output in Saudi Arabia and Kuwait. Based on the findings, the government officials of these countries should take steps in shifting these economies from huge extraction of oil and concentrate on manufacturing, and policymakers should understand the linkage of oil price with manufacturing sector for diversification of their economy and escape from Dutch Diseasehttp://www.jespk.net/publications/4389.pdfoil price effectmanufacturing outputasymmetric behaviorardlnardl |
| spellingShingle | Muhammad Faheem Mohamed Azali Lee Chin Nur Syazwani Mazlan New Evidence of Oil Price Fluctuations and Manufacturing Output in Saudi Arabia, Kuwait and United Arab Emirates Pakistan Journal of Commerce and Social Sciences oil price effect manufacturing output asymmetric behavior ardl nardl |
| title | New Evidence of Oil Price Fluctuations and Manufacturing Output in Saudi Arabia, Kuwait and United Arab Emirates |
| title_full | New Evidence of Oil Price Fluctuations and Manufacturing Output in Saudi Arabia, Kuwait and United Arab Emirates |
| title_fullStr | New Evidence of Oil Price Fluctuations and Manufacturing Output in Saudi Arabia, Kuwait and United Arab Emirates |
| title_full_unstemmed | New Evidence of Oil Price Fluctuations and Manufacturing Output in Saudi Arabia, Kuwait and United Arab Emirates |
| title_short | New Evidence of Oil Price Fluctuations and Manufacturing Output in Saudi Arabia, Kuwait and United Arab Emirates |
| title_sort | new evidence of oil price fluctuations and manufacturing output in saudi arabia kuwait and united arab emirates |
| topic | oil price effect manufacturing output asymmetric behavior ardl nardl |
| url | http://www.jespk.net/publications/4389.pdf |
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