The impact of oil production on economic growth in OPEC countries: Evidence from the panel approach

Abstract

This paper examines the causal relationship between oil production and economic growth in the Organization of the Petroleum Exporting Countries OPEC: Algeria, Angola, Ecuador, Islamic Republic of Iran, Iraq, Nigeria, Qatar, Saudi Arabia, UAE, and Venezuela, with annual time series data, from 1994 to 2013. A panel cointeration approach is suitable technique to examine oil production -economic growth nexus. Empirical results show that oil production variable and economic growth are cointegrated for these countries. Furthermore, we find by FMOLS approach and PMG model that for the panel as a whole there are statistically significant feedback effects between these variables which supports the energy conservation policies as a policymaker.