Title: Oil and growth nexus: fresh evidence from top-ten oil producing countries

Authors: Nasiru Inuwa; Sagir Adamu; Yakaka Bukar Maina; Aminu Bello

Addresses: Department of Economics, Faculty of Arts and Social Sciences, Gombe State University, P.M.B. 127, Gombe, Nigeria ' Department of Economics, Faculty of Social Sciences, Bauchi State University, Yuli Campus, Gadau, Nigeria ' Department of Economics, Faculty of Social Sciences, University of Maiduguri, Borno, Nigeria ' Department of Economics, Faculty of Arts and Social Sciences, Gombe State University, P.M.B. 127, Gombe, Nigeria

Abstract: Oil as one of the most frequently used categories of energy resources has also been viewed as a critical factor of production coequal to labour and capital. Thus, oil consumption is linked to many economic activities and any energy policies might likely affect this relationship. This study examines the nexus between oil consumption and economic growth by controlling for labour and capital within the framework of a modified aggregate production function in the top-ten oil producing countries in the world during the period 1990-2015. The study applied a recently developed cross-sectional augmented autoregressive distributed lag (CS-ARDL) model and Dumitrescu-Hurlin Granger causality test. The empirical result revealed that oil consumption stimulates economic growth in both short and long run. Similarly, the study shows that capital and labour significantly stimulate economic growth in not only the short but also long run. The causality results also unravelled a feedback causality relationship between oil consumption, labour, and economic growth. However, there is unidirectional causality running from economic growth to capital. Therefore, the policy implication of this study suggests that any oil conservation policies initiated by the government of the top-ten oil producing countries may be detrimental to their economic growth and development.

Keywords: CS-ARDL; economic growth; oil consumption; production function; capital; labour.

DOI: 10.1504/IJEGN.2023.135295

International Journal of the Energy-Growth Nexus, 2023 Vol.1 No.1, pp.3 - 22

Received: 04 Aug 2022
Accepted: 28 Oct 2022
Published online: 04 Dec 2023 *