IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v89y2024ics0301420723013090.html
   My bibliography  Save this article

Oil prices and the load capacity factor in African oil-producing OPEC members: Modeling the symmetric and asymmetric effects

Author

Listed:
  • Djedaiet, Aissa
  • Ayad, Hicham
  • Ben-Salha, Ousama

Abstract

Most oil-producing economies are heavily dependent on oil. Although this situation allowed some of them to grow rapidly, particularly during high oil prices, it may have adverse environmental repercussions. The purpose of this research is to empirically investigate the symmetric and asymmetric effects of oil prices on the load capacity factor in seven African oil-producing OPEC countries between 1990 and 2018. The paper employs the PMG-ARDL model to estimate the symmetric effects of oil prices, while the asymmetric effects are obtained using the PMG-NARDL. The empirical findings suggest slope heterogeneity and cross-section dependence, while the Westerlund cointegration test confirms the existence of a significant long-run relationship. The PMG-ARDL test reveals no evidence of significant symmetric effects of oil prices on the load capacity factor in the short- and long-run. On the contrary, the PMG-NARDL model indicates that the load capacity factor is negatively affected by oil price increases, with short-run effects exceed long-run effects. These results still hold when employing the CS-ARDL and CS-NARDL models. Moreover, the results suggest the validity of the Load Capacity Curve hypothesis with a turning point ranging between 6674 and 7623 dollars per capita. Finally, the causality analysis confirms the previous results, as the load capacity is only caused by oil price increases.

Suggested Citation

  • Djedaiet, Aissa & Ayad, Hicham & Ben-Salha, Ousama, 2024. "Oil prices and the load capacity factor in African oil-producing OPEC members: Modeling the symmetric and asymmetric effects," Resources Policy, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:jrpoli:v:89:y:2024:i:c:s0301420723013090
    DOI: 10.1016/j.resourpol.2023.104598
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723013090
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.104598?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ahdi Noomen Ajmi & Roula Inglesi-Lotz, 2021. "Revisiting the Kuznets Curve Hypothesis for Tunisia: Carbon Dioxide vs. Ecological Footprint," Working Papers 202171, University of Pretoria, Department of Economics.
    2. Zhang Shaohua & Farzan Yahya & Huy Pham & Muhammad Waqas, 2021. "Do Transparency and Anti-Monopoly Policies Matter for Financial Development? Evidence from a Panel ARDL-PMG Approach," Journal of Applied Economics, Taylor & Francis Journals, vol. 24(1), pages 1-16, January.
    3. Pata, Ugur Korkut & Kartal, Mustafa Tevfik & Erdogan, Sinan & Sarkodie, Samuel Asumadu, 2023. "The role of renewable and nuclear energy R&D expenditures and income on environmental quality in Germany: Scrutinizing the EKC and LCC hypotheses with smooth structural changes," Applied Energy, Elsevier, vol. 342(C).
    4. El Anshasy, Amany A. & Bradley, Michael D., 2012. "Oil prices and the fiscal policy response in oil-exporting countries," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 605-620.
    5. Muhammad Shahbaz & Smile Dube & Ilhan Ozturk & Abdul Jalil, 2015. "Testing the Environmental Kuznets Curve Hypothesis in Portugal," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 475-481.
    6. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    7. Dumitrescu, Elena-Ivona & Hurlin, Christophe, 2012. "Testing for Granger non-causality in heterogeneous panels," Economic Modelling, Elsevier, vol. 29(4), pages 1450-1460.
    8. Pata, Ugur Korkut & Ertugrul, Hasan Murat, 2023. "Do the Kyoto Protocol, geopolitical risks, human capital and natural resources affect the sustainability limit? A new environmental approach based on the LCC hypothesis," Resources Policy, Elsevier, vol. 81(C).
    9. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    10. Hashem Pesaran, M. & Yamagata, Takashi, 2008. "Testing slope homogeneity in large panels," Journal of Econometrics, Elsevier, vol. 142(1), pages 50-93, January.
    11. Granger, Clive W.J. & YOON, GAWON, 2002. "Hidden Cointegration," University of California at San Diego, Economics Working Paper Series qt9qn5f61j, Department of Economics, UC San Diego.
    12. Bakirtas, Tahsin & Akpolat, Ahmet Gökçe, 2020. "The relationship between crude oil exports, crude oil prices and military expenditures in some OPEC countries," Resources Policy, Elsevier, vol. 67(C).
    13. Joakim Westerlund, 2007. "Testing for Error Correction in Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 709-748, December.
    14. Shahbaz, Muhammad & Sinha, Avik, 2019. "Environmental Kuznets Curve for CO2 emission: A survey of empirical literature," MPRA Paper 100257, University Library of Munich, Germany, revised 2019.
    15. Richard York & Eugene A. Rosa & Thomas Dietz, 2004. "The Ecological Footprint Intensity of National Economies," Journal of Industrial Ecology, Yale University, vol. 8(4), pages 139-154, October.
    16. Ugur Korkut Pata, 2021. "Do renewable energy and health expenditures improve load capacity factor in the USA and Japan? A new approach to environmental issues," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(9), pages 1427-1439, December.
    17. Kemal Eyuboglu & Umut Uzar, 2020. "The impact of tourism on CO2 emission in Turkey," Current Issues in Tourism, Taylor & Francis Journals, vol. 23(13), pages 1631-1645, July.
    18. Dinda, Soumyananda & Coondoo, Dipankor, 2006. "Income and emission: A panel data-based cointegration analysis," Ecological Economics, Elsevier, vol. 57(2), pages 167-181, May.
    19. Nguyen, Kim Hanh & Kakinaka, Makoto, 2019. "Renewable energy consumption, carbon emissions, and development stages: Some evidence from panel cointegration analysis," Renewable Energy, Elsevier, vol. 132(C), pages 1049-1057.
    20. Ozcan, Burcu, 2013. "The nexus between carbon emissions, energy consumption and economic growth in Middle East countries: A panel data analysis," Energy Policy, Elsevier, vol. 62(C), pages 1138-1147.
    21. Blomquist, Johan & Westerlund, Joakim, 2013. "Testing slope homogeneity in large panels with serial correlation," Economics Letters, Elsevier, vol. 121(3), pages 374-378.
    22. Arifur Rahman Atiqur Rahman & Mohd Shahidan Shaari & Faiz Masnan & Miguel Angel Esquivias, 2022. "The Impacts of Energy Use, Tourism and Foreign Workers on CO 2 Emissions in Malaysia," Sustainability, MDPI, vol. 14(4), pages 1-14, February.
    23. Ayad, Hicham & Abbas, Shujaat & Nakhli, Mohamed Sahbi & Jibir, Adamu & Shahzad, Umer, 2023. "Industrial growth, health care policy uncertainty and carbon emissions: Do trade and tax policy uncertainties matter for sustainable development in the USA?," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 151-160.
    24. M. Hashem Pesaran & Badi H. Baltagi, 2007. "Heterogeneity and cross section dependence in panel data models: theory and applications introduction," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 229-232.
    25. Yan-Qing Kang & Tao Zhao & Peng Wu, 2016. "Impacts of energy-related CO 2 emissions in China: a spatial panel data technique," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 81(1), pages 405-421, March.
    26. Isiksal, Aliya Zhakanova & Assi, Ala Fathi, 2022. "Determinants of sustainable energy demand in the European economic area: Evidence from the PMG-ARDL model," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    27. repec:ipg:wpaper:2014-529 is not listed on IDEAS
    28. Hamilton, James D, 1983. "Oil and the Macroeconomy since World War II," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 228-248, April.
    29. Zhike Lv & Ting Xu, 2019. "Trade openness, urbanization and CO emissions: Dynamic panel data analysis of middle-income countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 28(3), pages 317-330, April.
    30. Shahbaz, Muhammad & Nasir, Muhammad Ali & Roubaud, David, 2018. "Environmental degradation in France: The effects of FDI, financial development, and energy innovations," Energy Economics, Elsevier, vol. 74(C), pages 843-857.
    31. Dobdinga Cletus Fonchamnyo & Gildas Dohba Dinga & Vahsegmi Carolle Ngum, 2021. "Revisiting the nexus between domestic investment, foreign direct investment and external debt in SSA countries: PMG‐ARDL approach," African Development Review, African Development Bank, vol. 33(3), pages 479-491, September.
    32. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    33. Omri, Anis & Daly, Saida & Rault, Christophe & Chaibi, Anissa, 2015. "Financial development, environmental quality, trade and economic growth: What causes what in MENA countries," Energy Economics, Elsevier, vol. 48(C), pages 242-252.
    34. Baltagi, Badi H. & Feng, Qu & Kao, Chihwa, 2012. "A Lagrange Multiplier test for cross-sectional dependence in a fixed effects panel data model," Journal of Econometrics, Elsevier, vol. 170(1), pages 164-177.
    35. Yan-Qing Kang & Tao Zhao & Peng Wu, 2016. "Impacts of energy-related CO2 emissions in China: a spatial panel data technique," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 81(1), pages 405-421, March.
    36. Umar Tijjani Babuga & Niaz Ahmad Mohd Naseem, 2022. "Oil Price Change and Economic Growth: Evidence from Net Sub-Saharan Africa Oil Exporting Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 369-378, March.
    37. Pata, Ugur Korkut & Isik, Cem, 2021. "Determinants of the load capacity factor in China: A novel dynamic ARDL approach for ecological footprint accounting," Resources Policy, Elsevier, vol. 74(C).
    38. Ugur Korkut Pata & Banu Tanriover, 2023. "Is the Load Capacity Curve Hypothesis Valid for the Top Ten Tourism Destinations?," Sustainability, MDPI, vol. 15(2), pages 1-15, January.
    39. repec:taf:jnlbes:v:30:y:2012:i:2:p:256-264 is not listed on IDEAS
    40. Hasanov, Fakhri J. & Liddle, Brantley & Mikayilov, Jeyhun I., 2018. "The impact of international trade on CO2 emissions in oil exporting countries: Territory vs consumption emissions accounting," Energy Economics, Elsevier, vol. 74(C), pages 343-350.
    41. Apergis, Nicholas & Payne, James E., 2009. "CO2 emissions, energy usage, and output in Central America," Energy Policy, Elsevier, vol. 37(8), pages 3282-3286, August.
    42. Halkos, George E. & Paizanos, Epameinondas Α., 2016. "The effects of fiscal policy on CO2 emissions: Evidence from the U.S.A," Energy Policy, Elsevier, vol. 88(C), pages 317-328.
    43. Farhani, Sahbi & Shahbaz, Muhammad & Sbia, Rashid & Chaibi, Anissa, 2014. "What does MENA region initially need: Grow output or mitigate CO2 emissions?," Economic Modelling, Elsevier, vol. 38(C), pages 270-281.
    44. Herwartz, H. & Siedenburg, F., 2008. "Homogenous panel unit root tests under cross sectional dependence: Finite sample modifications and the wild bootstrap," Computational Statistics & Data Analysis, Elsevier, vol. 53(1), pages 137-150, September.
    45. Esmaeili, Abdoulkarim & Abdollahzadeh, Negar, 2009. "Oil exploitation and the environmental Kuznets curve," Energy Policy, Elsevier, vol. 37(1), pages 371-374, January.
    46. Sania Ashraf & Jithin P & Zaghum Umar, 2022. "The asymmetric relationship between foreign direct investment, oil prices and carbon emissions: evidence from Gulf Cooperative Council economies," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2080316-208, December.
    47. Elyas Abdulahi Mohamued & Masood Ahmed & Paula Pypłacz & Katarzyna Liczmańska-Kopcewicz & Muhammad Asif Khan, 2021. "Global Oil Price and Innovation for Sustainability: The Impact of R&D Spending, Oil Price and Oil Price Volatility on GHG Emissions," Energies, MDPI, vol. 14(6), pages 1-18, March.
    48. Taha Zaghdoudi, 2017. "Oil prices, renewable energy, CO2 emissions and economic growth in OECD countries," Economics Bulletin, AccessEcon, vol. 37(3), pages 1844-1850.
    49. Grzegorz Mentel & Waldemar Tarczyński & Marek Dylewski & Raufhon Salahodjaev, 2022. "Does Renewable Energy Sector Affect Industrialization-CO 2 Emissions Nexus in Europe and Central Asia?," Energies, MDPI, vol. 15(16), pages 1-12, August.
    50. Xuan, Di & Jiang, Xiaoyan & Fang, Yan, 2023. "Can globalization and the green economy hedge natural resources? Functions of population growth and financial development in BRICS countries," Resources Policy, Elsevier, vol. 82(C).
    51. Jones, Glenn A. & Warner, Kevin J., 2016. "The 21st century population-energy-climate nexus," Energy Policy, Elsevier, vol. 93(C), pages 206-212.
    52. Andrew Adewale Alola & Oktay Özkan & Ojonugwa Usman, 2023. "Role of Non-Renewable Energy Efficiency and Renewable Energy in Driving Environmental Sustainability in India: Evidence from the Load Capacity Factor Hypothesis," Energies, MDPI, vol. 16(6), pages 1-16, March.
    53. Mrabet, Zouhair & Alsamara, Mouyad, 2017. "Testing the Kuznets Curve hypothesis for Qatar: A comparison between carbon dioxide and ecological footprint," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 1366-1375.
    54. Shahbaz, muhammad & Solarin, Sakiru Adebola & Sbia, Rashid & Bibi, Sadia, 2015. "Does Energy Intensity Contribute to CO2 Emissions? A Trivariate Analysis in Selected African Countries," MPRA Paper 64335, University Library of Munich, Germany, revised 19 Mar 2015.
    55. Olusanya Elisa Olubusoye & Dasauki Musa & Salvatore Ercolano, 2020. "Carbon Emissions And Economic Growth In Africa: Are They Related?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1850400-185, January.
    56. Ansari, Mohd Arshad, 2022. "Re-visiting the Environmental Kuznets curve for ASEAN: A comparison between ecological footprint and carbon dioxide emissions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    57. Espoir, Delphin Kamanda & Sunge, Regret, 2021. "Co2 Emissions and Economic Development in Africa: Evidence from A Dynamic Spatial Panel Model," EconStor Preprints 234131, ZBW - Leibniz Information Centre for Economics.
    58. Apergis, Nicholas, 2016. "Environmental Kuznets curves: New evidence on both panel and country-level CO2 emissions," Energy Economics, Elsevier, vol. 54(C), pages 263-271.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bakry, Walid & Mallik, Girijasankar & Nghiem, Xuan-Hoa & Sinha, Avik & Vo, Xuan Vinh, 2023. "Is green finance really “green”? Examining the long-run relationship between green finance, renewable energy and environmental performance in developing countries," Renewable Energy, Elsevier, vol. 208(C), pages 341-355.
    2. Hussein Moghaddam & Robert M. Kunst, 2023. "The Role of Natural Gas in Mitigating Greenhouse Gas Emissions: The Environmental Kuznets Curve Hypothesis for Major Gas-Producing Countries," Sustainability, MDPI, vol. 15(5), pages 1-20, February.
    3. Lazăr, Dorina & Minea, Alexandru & Purcel, Alexandra-Anca, 2019. "Pollution and economic growth: Evidence from Central and Eastern European countries," Energy Economics, Elsevier, vol. 81(C), pages 1121-1131.
    4. Huaping Sun & Love Enna & Augustine Monney & Dang Khoa Tran & Ehsan Rasoulinezhad & Farhad Taghizadeh-Hesary, 2020. "The Long-Run Effects of Trade Openness on Carbon Emissions in Sub-Saharan African Countries," Energies, MDPI, vol. 13(20), pages 1-18, October.
    5. Soto, Gonzalo Hernández, 2024. "The effects of foreign direct investment on environmentally related technologies in Latin America," Resources Policy, Elsevier, vol. 90(C).
    6. Sun, Huaping & Samuel, Clottey Attuquaye & Kofi Amissah, Joshua Clifford & Taghizadeh-Hesary, Farhad & Mensah, Isaac Adjei, 2020. "Non-linear nexus between CO2 emissions and economic growth: A comparison of OECD and B&R countries," Energy, Elsevier, vol. 212(C).
    7. Alvarado, Rafael & Deng, Qiushi & Tillaguango, Brayan & Méndez, Priscila & Bravo, Diana & Chamba, José & Alvarado-Lopez, María & Ahmad, Munir, 2021. "Do economic development and human capital decrease non-renewable energy consumption? Evidence for OECD countries," Energy, Elsevier, vol. 215(PB).
    8. Erdogan, Sinan, 2024. "On the impact of natural resources on environmental sustainability in African countries: A comparative approach based on the EKC and LCC hypotheses," Resources Policy, Elsevier, vol. 88(C).
    9. Kostakis, Ioannis & Arauzo-Carod, Josep-Maria, 2023. "The key roles of renewable energy and economic growth in disaggregated environmental degradation: Evidence from highly developed, heterogeneous and cross-correlated countries," Renewable Energy, Elsevier, vol. 206(C), pages 1315-1325.
    10. Chien, Fengsheng & Anwar, Ahsan & Hsu, Ching-Chi & Sharif, Arshian & Razzaq, Asif & Sinha, Avik, 2021. "The role of information and communication technology in encountering environmental degradation: Proposing an SDG framework for the BRICS countries," Technology in Society, Elsevier, vol. 65(C).
    11. Ansari, Mohd Arshad, 2022. "Re-visiting the Environmental Kuznets curve for ASEAN: A comparison between ecological footprint and carbon dioxide emissions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    12. Jahanger, Atif & Usman, Muhammad & Murshed, Muntasir & Mahmood, Haider & Balsalobre-Lorente, Daniel, 2022. "The linkages between natural resources, human capital, globalization, economic growth, financial development, and ecological footprint: The moderating role of technological innovations," Resources Policy, Elsevier, vol. 76(C).
    13. Muhammad Azam & Zia Ur Rehman & Yusnidah Ibrahim, 2022. "Causal nexus in industrialization, urbanization, trade openness, and carbon emissions: empirical evidence from OPEC economies," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(12), pages 13990-14010, December.
    14. Zhang Chenghu & Muhammad Arif & Khurram Shehzad & Mahmood Ahmad & Judit Oláh, 2021. "Modeling the Dynamic Linkage between Tourism Development, Technological Innovation, Urbanization and Environmental Quality: Provincial Data Analysis of China," IJERPH, MDPI, vol. 18(16), pages 1-21, August.
    15. Alvarado, Rafael & Tillaguango, Brayan & Murshed, Muntasir & Ochoa-Moreno, Santiago & Rehman, Abdul & Işık, Cem & Alvarado-Espejo, Johana, 2022. "Impact of the informal economy on the ecological footprint: The role of urban concentration and globalization," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 750-767.
    16. Zahed Ghaderi & Behnaz Saboori & Mana Khoshkam, 2023. "Revisiting the Environmental Kuznets Curve Hypothesis in the MENA Region: The Roles of International Tourist Arrivals, Energy Consumption and Trade Openness," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    17. Iftikhar Yasin & Nawaz Ahmad & M. Aslam Chaudhary, 2020. "Catechizing the Environmental-Impression of Urbanization, Financial Development, and Political Institutions: A Circumstance of Ecological Footprints in 110 Developed and Less-Developed Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(2), pages 621-649, January.
    18. Lian Xue & Mohammad Haseeb & Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Muntasir Murshed, 2021. "Renewable Energy Use and Ecological Footprints Mitigation: Evidence from Selected South Asian Economies," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    19. Gao, Jinchao & Hassan, Muhammad Shahid & Kalim, Rukhsana & Sharif, Arshian & Alkhateeb, Tarek Tawfik Yousef & Mahmood, Haider, 2023. "The role of clean and unclean energy resources in inspecting N-shaped impact of industrial production on environmental quality: A case of high polluting economies," Resources Policy, Elsevier, vol. 80(C).
    20. Gorus, Muhammed Sehid & Aslan, Murat, 2019. "Impacts of economic indicators on environmental degradation: Evidence from MENA countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 103(C), pages 259-268.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:89:y:2024:i:c:s0301420723013090. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.