Abstract
Traditional types of energy resources, among which oil is primary, have a huge influence on economic development in various manifestations. In our research, we discuss dependence of economic growth in oil-exporting countries on first-order factors, such as oil prices, oil production, and structural shift in a share of oil exports. To review 2005-2019, we chose leading oil-exporting nations, including the OPEC members (Iraq, Iran, Libya, Saudi Arabia, and Nigeria), as well as countries outside this group (Russia, Kazakhstan, Azerbaijan, and Norway). Having used statistical and regression techniques, we confirm that the correlation between oil price fluctuations and economic growth raises with the scale effect. Larger economies (by absolute GDP in oil-exporting nations and hydrocarbon production) might generate more intensive economic growth from positive changes in oil prices than small economies. Also, the OPEC members show the strongest structural shifts in the change of the share of oil exports than the other countries. Resulting regression dependences led us to the conclusion that in oil-exporting countries, economic growth largely depends on an increase in oil prices and changes in oil production rates. But contrary to the expectations saying that in time of downturns, as far as global oil prices fall, nations will reduce oil exports, we observe the reverse picture – changed role of the price factor. We explain this with the keeping income-balance strategy, where the oil price parameter is a tool to choose ideal production. Our findings show that with the 1%-increase in oil production, the countries under considerations (the OPEC members) might reach GDP from 0.0367% (Iraq) to 0.437% (Libya). For countries outside OPEC, such a GDP growth might be more intensive. For instance, in Russia, it might be up to 1.559%. This also points out that the joint coordinating policy in oil production affects the economic growth potential.
Highlights
Efficient functioning of national economies largely depends on their structures, proportions of leading sectors, and performance
Many countries under consideration were highly dependent on oil exports as its share in total value of exports was over 70% (Iraq, Libya, Saudi Arabia, Nigeria, and Azerbaijan)
If at the micro level, we generally talk about an important connective role of energy resources and their involvement in the production process, at the macro level, in some countries, exported natural resource is a key source of income, and, economic growth
Summary
Efficient functioning of national economies largely depends on their structures, proportions of leading sectors, and performance. Economy performance evaluation is of particular relevance for the nations that might be classified as non-diversified in terms of a market power of one or a number of related sectors (Kuboniwa, 2012; Figueroa and Calfucura, 2010; Litau, 2018; Kheyfets and Chernova, 2021). This statement is true for the nations that specialize in exports of natural energy resources, such as oil and gas (Xiong et al, 2015; Al-Rawashdeh et al, 2013; Ji et al, 2014; Illig and Schindler, 2017).
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