Oil Prices and Economic Growth In Oil Producing Countries: A Panel Data Approach

Abstract

Oil prices have continued to garner increasing attention from academia, international communities, international organisations, oil companies, Economist and governments. The outbreak of the Nobel coronavirus (COVID-19), which affected the price of oil has raised lots of concern to the future of crude oil.  This study examines the economic growth of the OPEC members with reference to oil price, oil production, capital and labour stocks. The Fixed and Random effect of panel data analysis was used, and based on the Hausman test, the fixed effect was the suitable method of analysis. The study, therefore, found that oil production is not significant in influencing the economic growth of OPEC member countries, whereas, oil price, labour force and capital formation are significant in influencing the economic growth of the countries. The study, therefore, recommends that OPEC countries should embark on the development of competitive goods and services to serve as an alternative source of generating revenue.