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Dutch disease effect of oil rents on agriculture value added in Middle East and North African (MENA) countries

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  • Apergis, Nicholas
  • El-Montasser, Ghassen
  • Sekyere, Emmanuel
  • Ajmi, Ahdi N.
  • Gupta, Rangan

Abstract

This paper investigates the effect of oil rents on agriculture value added in oil producing Middle East and North African (MENA) countries. Annual data from 1970 to 2011, panel cointegration tests by Pedroni (1999), long ran panel causality tests by Canning and Pedroni (2008), and two-step System GMM by Blundell and Bond (1998) are used in this study. We find a negative relationship between oil rents and agriculture value added in the long run, with a rather slow rate of short run adjustment of agriculture value added back to equilibrium after a boom in oil rents. These results indicate that an oil sector boom is associated with a contraction in the agriculture sectors of the countries in the panel in the long run. This is probably attributable to a resource movement effect from other economic sectors to the booming oil sector in these countries. This serves as evidence of a Dutch disease effect of an oil sector boom on agriculture in the MENA countries in this study.

Suggested Citation

  • Apergis, Nicholas & El-Montasser, Ghassen & Sekyere, Emmanuel & Ajmi, Ahdi N. & Gupta, Rangan, 2014. "Dutch disease effect of oil rents on agriculture value added in Middle East and North African (MENA) countries," Energy Economics, Elsevier, vol. 45(C), pages 485-490.
    • Handle: RePEc:eee:eneeco:v:45:y:2014:i:c:p:485-490
    DOI: 10.1016/j.eneco.2014.07.025
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    More about this item

    Keywords

    Dutch disease; Oil rents; Agriculture value added; Middle East and North African countries;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • N55 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Asia including Middle East
    • N57 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Africa; Oceania
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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