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The Effect of Crude Oil Prices and Internet on Economic Growth in Timor Leste

Author

Listed:
  • Wali Aya Rumbia

    (Departmen of Economics, Halu Oleo University, Kendari 93232, Indonesia,)

  • Abd Azis Muthalib

    (Departmen of Economics, Halu Oleo University, Kendari 93232, Indonesia,)

  • Pasrun Adam

    (Department of Mathematics, Halu Oleo University, Kendari 93232, Indonesia,)

  • Asrul Jabani

    (Study Program of Manajement, Sekolah Tinggi Ilmu Ekonomi Enam-Enam, Kendari 93121, Indonesia,)

  • Yuwanda Purnamasari Pasrun

    (Department of Information System, Sembilanbelas November University, Kolaka 93514, Indonesia,)

  • Dzulfikri Azis Muthalib

    (Study Program of Management, Universitas Muhammadyah, Kendari 93118, Indonesia.)

Abstract

Continuous economic growth improves the welfare and the living standards of the people. However, for a country to experience economic growth, several factors come into play, including resource endowment, economic policies, political stability, and more. This research aimed to examine the effect of crude oil prices and internet on economic growth in Timor Leste. An autoregressive distributed lag model was used to analyze the time series data from 2005 to 2020. The cointegration test results showed that crude oil prices, internet, and economic growth are cointegrated. Based on the model coefficients, the estimation results revealed crude oil prices and internet have a significant effect on the country s long-term and short-term economic growth. The long-term effect of crude oil prices on economic growth is negative. In every 1% increase of crude oil prices, there is a 10.3% decrease in economic growth. A 1% reduction in crude oil prices leads to a 10.3% economic growth. Furthermore, the long-term effect of the internet has a long-term positive effect on economic growth. Every 1% internet increase, there is a corresponding 27.65% increase in economic growth.

Suggested Citation

  • Wali Aya Rumbia & Abd Azis Muthalib & Pasrun Adam & Asrul Jabani & Yuwanda Purnamasari Pasrun & Dzulfikri Azis Muthalib, 2022. "The Effect of Crude Oil Prices and Internet on Economic Growth in Timor Leste," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 275-280.
    • Handle: RePEc:eco:journ2:2022-01-34
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    References listed on IDEAS

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    1. Mirko Abbritti & Juan Equiza-Goñi & Fernando Perez Gracia & Tommaso Trani, 2020. "The effect of oil price shocks on economic activity: a local projections approach," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(4), pages 708-723, October.
    2. Dadson Awunyo-Vitor & Solomon Samanhyia & Elijah Addo Bonney, 2018. "Do oil prices influence economic growth in Ghana? An empirical analysis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1496551-149, January.
    3. Arfaoui, Mongi, 2018. "On the spot-futures relationship in crude-refined petroleum prices: New evidence from an ARDL bounds testing approach," Journal of Commodity Markets, Elsevier, vol. 11(C), pages 48-58.
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    Cited by:

    1. Sha, Zhiping, 2022. "Total natural resources, oil prices, and sustainable economic performance: Evidence from global data," Resources Policy, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    Crude Oil Prices; Internet; Economic Growth; Autoregressive Distributed Lag Model;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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