The effect of oil prices on the economic diversification process: Evidence from the GCC countries

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Abstract

We investigate the Granger non-causality relationship between oil prices and the economic diversification process in the GCC countries during the period 1989-2017. This paper uses Pedroni's (2004) panel cointegration tests and the panel non-causality test of Dumitrescu-Hurlin (2012). We find that oil price changes Granger cause the movements in the diversification progression. It indicates that economic diversification of the GCC countries is not a priority to the GCC governments because their role is changing. As a result, the GCC countries should give priority to economic diversification if it is a strategic plan for their economies.

Original languageEnglish
Pages (from-to)334-341
Number of pages8
JournalEconomics and Business Letters
Volume9
Issue number4
DOIs
Publication statusPublished - Dec 2020

Keywords

  • Economic diversification
  • Granger non-causality test
  • Oil prices
  • Panel analysis
  • The GCC countries

ASJC Scopus subject areas

  • Business and International Management
  • General Economics,Econometrics and Finance

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