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The Economic and Non-Economic Determinants of Economic Growth in Oil-Exporting Arab Countries

Received: 8 May 2019     Accepted: 10 June 2019     Published: 26 June 2019
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Abstract

This paper aims at exploring the main determinants of economic growth in Oil-Exporting Arab countries (OEAC) by shedding light on the most effective determinants. It is then wished that governments and policy makers would concentrate on and take them into consideration when they are designing and applying their public policies. The study used panel data for six OEAC over the period of 1998-2017. Some study variables were not stationary at level but they became stationary after taking the first difference for them. The result of applying panel Pedroni cointegration test revealed that the model was cointegrated. Therefore, FMOLS model was applied for estimation showing that gross fixed capital formation, labor force growth rate, economic freedom, rule of law, regulatory quality and government effectiveness have statistically significant positive impact on the economic growth of OEAC, while trade openness, control of corruption, political stability and voice and accountability have insignificant effects on their economic growth during the study period. Moreover, the Global Financial Crisis of 2008 with its slow recovery has a significant negative impact on the economic growth of such countries. Therefore, the study recommends OEACs’ governments to make “real” institutional reforms and adopt the appropriate polices that eliminate corruption and rent seeking behaviour and enhance the rule of law. They also need to improve the quality of education and to develop the skills and expertise of their labour force. In addition, they have to establish specialization in the production of goods in which they have comparative advantages and diversify their production and sources of national income, and not to depend only on exporting natural raw materials, which altogether eventually ensure resources are efficiently and effectively utilized in pursuit of their economic growth and social development.

Published in International Journal of Business and Economics Research (Volume 8, Issue 3)
DOI 10.11648/j.ijber.20190803.18
Page(s) 142-152
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Economic Growth, Arab Countries, Governance, Trade Openness

References
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  • APA Style

    Elham Mohammad Alhaj Yousef, Taleb Awad Warrad. (2019). The Economic and Non-Economic Determinants of Economic Growth in Oil-Exporting Arab Countries. International Journal of Business and Economics Research, 8(3), 142-152. https://doi.org/10.11648/j.ijber.20190803.18

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    ACS Style

    Elham Mohammad Alhaj Yousef; Taleb Awad Warrad. The Economic and Non-Economic Determinants of Economic Growth in Oil-Exporting Arab Countries. Int. J. Bus. Econ. Res. 2019, 8(3), 142-152. doi: 10.11648/j.ijber.20190803.18

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    AMA Style

    Elham Mohammad Alhaj Yousef, Taleb Awad Warrad. The Economic and Non-Economic Determinants of Economic Growth in Oil-Exporting Arab Countries. Int J Bus Econ Res. 2019;8(3):142-152. doi: 10.11648/j.ijber.20190803.18

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  • @article{10.11648/j.ijber.20190803.18,
      author = {Elham Mohammad Alhaj Yousef and Taleb Awad Warrad},
      title = {The Economic and Non-Economic Determinants of Economic Growth in Oil-Exporting Arab Countries},
      journal = {International Journal of Business and Economics Research},
      volume = {8},
      number = {3},
      pages = {142-152},
      doi = {10.11648/j.ijber.20190803.18},
      url = {https://doi.org/10.11648/j.ijber.20190803.18},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190803.18},
      abstract = {This paper aims at exploring the main determinants of economic growth in Oil-Exporting Arab countries (OEAC) by shedding light on the most effective determinants. It is then wished that governments and policy makers would concentrate on and take them into consideration when they are designing and applying their public policies. The study used panel data for six OEAC over the period of 1998-2017. Some study variables were not stationary at level but they became stationary after taking the first difference for them. The result of applying panel Pedroni cointegration test revealed that the model was cointegrated. Therefore, FMOLS model was applied for estimation showing that gross fixed capital formation, labor force growth rate, economic freedom, rule of law, regulatory quality and government effectiveness have statistically significant positive impact on the economic growth of OEAC, while trade openness, control of corruption, political stability and voice and accountability have insignificant effects on their economic growth during the study period. Moreover, the Global Financial Crisis of 2008 with its slow recovery has a significant negative impact on the economic growth of such countries. Therefore, the study recommends OEACs’ governments to make “real” institutional reforms and adopt the appropriate polices that eliminate corruption and rent seeking behaviour and enhance the rule of law. They also need to improve the quality of education and to develop the skills and expertise of their labour force. In addition, they have to establish specialization in the production of goods in which they have comparative advantages and diversify their production and sources of national income, and not to depend only on exporting natural raw materials, which altogether eventually ensure resources are efficiently and effectively utilized in pursuit of their economic growth and social development.},
     year = {2019}
    }
    

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  • TY  - JOUR
    T1  - The Economic and Non-Economic Determinants of Economic Growth in Oil-Exporting Arab Countries
    AU  - Elham Mohammad Alhaj Yousef
    AU  - Taleb Awad Warrad
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    JF  - International Journal of Business and Economics Research
    JO  - International Journal of Business and Economics Research
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    PB  - Science Publishing Group
    SN  - 2328-756X
    UR  - https://doi.org/10.11648/j.ijber.20190803.18
    AB  - This paper aims at exploring the main determinants of economic growth in Oil-Exporting Arab countries (OEAC) by shedding light on the most effective determinants. It is then wished that governments and policy makers would concentrate on and take them into consideration when they are designing and applying their public policies. The study used panel data for six OEAC over the period of 1998-2017. Some study variables were not stationary at level but they became stationary after taking the first difference for them. The result of applying panel Pedroni cointegration test revealed that the model was cointegrated. Therefore, FMOLS model was applied for estimation showing that gross fixed capital formation, labor force growth rate, economic freedom, rule of law, regulatory quality and government effectiveness have statistically significant positive impact on the economic growth of OEAC, while trade openness, control of corruption, political stability and voice and accountability have insignificant effects on their economic growth during the study period. Moreover, the Global Financial Crisis of 2008 with its slow recovery has a significant negative impact on the economic growth of such countries. Therefore, the study recommends OEACs’ governments to make “real” institutional reforms and adopt the appropriate polices that eliminate corruption and rent seeking behaviour and enhance the rule of law. They also need to improve the quality of education and to develop the skills and expertise of their labour force. In addition, they have to establish specialization in the production of goods in which they have comparative advantages and diversify their production and sources of national income, and not to depend only on exporting natural raw materials, which altogether eventually ensure resources are efficiently and effectively utilized in pursuit of their economic growth and social development.
    VL  - 8
    IS  - 3
    ER  - 

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Author Information
  • Business Economics Department, Faculty of Business, University of Jordan, Amman, Jordan

  • Business Economics Department, Faculty of Business, University of Jordan, Amman, Jordan

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