IDEAS home Printed from https://ideas.repec.org/a/pts/journl/y2024i1p45-54.html
   My bibliography  Save this article

Direct And Indirect Effect Of Globalization On Economic Growth In Indonesia

Author

Listed:
  • Ismail KAVAZ

    (Firat University, Türkiye)

  • Araz Waleed HUSSEIN

    (Firat University, Türkiye)

Abstract

This study aims to examine the relationship between crude oil prices, population, exports, inflation, and economic growth in Iraq based on annual time series from 1997 to 2022. As it is well known, crude oil is one of the most important resources for energy production, transportation, and various industries. Moreover, this energy source has a critical importance in terms of the international trade. Therefore, the effects of crude oil in Iraq’s economy is analyzed in this study. To achieve the degree and magnitude of the parameters used in the models, the Ordinary Least Squares method and the Johansen cointegration test are utilized. According to the empirical results of the study, while crude oil prices, population, and exports have a positive impact on economic growth, inflation has a negative impact. Additionally, a long-term relationship is found between crude oil prices, population, exports, inflation, and economic growth.as a result of cointegration test with the VAR system. Based on these results, it can be said that sustainable oil producing is very crucial in Iraq. Since the government income of Iraq relies heavily on revenue generated from oil exports, the improving and regulation activities should be considered in the oil sector. On the other hand, as the oil is finite resource, the local policymakers need to focus on researching alternative sources for exports and research the ways to boost the country’s GDP.

Suggested Citation

  • Ismail KAVAZ & Araz Waleed HUSSEIN, 2024. "Direct And Indirect Effect Of Globalization On Economic Growth In Indonesia," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 23(1), pages 45-54.
  • Handle: RePEc:pts:journl:y:2024:i:1:p:45-54
    as

    Download full text from publisher

    File URL: http://economic.upit.ro/RePEc/pdf/2024_1_6.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ismail Kavaz, 2020. "Estimating the Price and Income Elasticities of Crude Oil Import Demand for Turkey," International Econometric Review (IER), Econometric Research Association, vol. 12(2), pages 98-111, September.
    2. Robert M. Solow, 1994. "Perspectives on Growth Theory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 45-54, Winter.
    3. Narayan, Paresh Kumar & Narayan, Seema & Smyth, Russell, 2008. "Are oil shocks permanent or temporary? Panel data evidence from crude oil and NGL production in 60 countries," Energy Economics, Elsevier, vol. 30(3), pages 919-936, May.
    4. M. Hakan Berument & Nildag Basak Ceylan & Nukhet Dogan, 2010. "The Impact of Oil Price Shocks on the Economic Growth of Selected MENA1 Countries," The Energy Journal, , vol. 31(1), pages 149-176, January.
    5. Darrat, Ali F & Gilley, Otis W & Meyer, Don J, 1996. "US Oil Consumption, Oil Prices, and the Macroeconomy," Empirical Economics, Springer, vol. 21(3), pages 317-334.
    6. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    7. Sweidan, Osama D. & Elbargathi, Khadiga, 2023. "Economic diversification in Saudi Arabia: Comparing the impact of oil prices, geopolitical risk, and government expenditures," International Economics, Elsevier, vol. 175(C), pages 13-24.
    8. Johansen, Soren, 1992. "Cointegration in partial systems and the efficiency of single-equation analysis," Journal of Econometrics, Elsevier, vol. 52(3), pages 389-402, June.
    9. van Eyden, Reneé & Difeto, Mamothoana & Gupta, Rangan & Wohar, Mark E., 2019. "Oil price volatility and economic growth: Evidence from advanced economies using more than a century’s data," Applied Energy, Elsevier, vol. 233, pages 612-621.
    10. Motunrayo O AKINSOLA & NM ODHIAMBO, 2020. "Oil Price And Economic Growth Of Oil-Importing Countries: A Review Of International Literature," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 20(1), pages 129-140.
    11. M. Hakan Berument & Nildag Basak Ceylan & Nukhet Dogan, 2010. "The Impact of Oil Price Shocks on the Economic Growth of Selected MENA1 Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 149-176.
    12. Herwartz, Helmut & Plödt, Martin, 2016. "The macroeconomic effects of oil price shocks: Evidence from a statistical identification approach," Journal of International Money and Finance, Elsevier, vol. 61(C), pages 30-44.
    13. Abeysinghe, Tilak, 2001. "Estimation of direct and indirect impact of oil price on growth," Economics Letters, Elsevier, vol. 73(2), pages 147-153, November.
    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. Tillaguango, Brayan & Hossain, Mohammad Razib & Cuesta, Lizeth & Ahmad, Munir & Alvarado, Rafael & Murshed, Muntasir & Rehman, Abdul & Işık, Cem, 2024. "Impact of oil price, economic globalization, and inflation on economic output: Evidence from Latin American oil-producing countries using the quantile-on-quantile approach," Energy, Elsevier, vol. 302(C).
    2. Shahriyar Mukhtarov & Sannur Aliyev & Javid Zeynalov, 2020. "The Effects of Oil Prices on Macroeconomic Variables: Evidence from Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 72-80.
    3. Śmiech, Sławomir & Papież, Monika & Rubaszek, Michał & Snarska, Małgorzata, 2021. "The role of oil price uncertainty shocks on oil-exporting countries," Energy Economics, Elsevier, vol. 93(C).
    4. Pham T. T. Trinh & Bui T. T. My, 2023. "The impact of world oil price shocks on macroeconomic variables in Vietnam: the transmission through domestic oil price," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 37(1), pages 67-87, May.
    5. Sumera Arshad & Amajd Ali, 2016. "Trade-off between Inflation, Interest and Unemployment Rate of Pakistan: Revisited," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 5(4), pages 193-209, December.
    6. Xu, T.T., 2012. "The role of credit in international business cycles," Cambridge Working Papers in Economics 1202, Faculty of Economics, University of Cambridge.
    7. Campos, Julia & Ericsson, Neil R. & Hendry, David F., 1996. "Cointegration tests in the presence of structural breaks," Journal of Econometrics, Elsevier, vol. 70(1), pages 187-220, January.
    8. Asrori Asrori & Muhammad Ihlashul Amal & Atta Putra Harjanto, 2019. "Company Characteristics on the Corporate Social Reporting Index of Corporate Social and Environmental Disclosure in Indonesian Public Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 481-488.
    9. Hany Abdel-Latif & Tapas Mishra & Anita Staneva, 2019. "Arab Countries between Winter and Spring: Where Democracy Shock Goes Next!," Economies, MDPI, vol. 7(1), pages 1-19, March.
    10. Amjad Ali & Muhammad Irfan Chani, 2013. "Disaggregated Import Demand Function: A Case Study of Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 1(1), pages 1-14, January.
    11. Markus Brueckner & Haidi Hong & Joaquin Vespignani, 2023. "Effects of Government Regulation of Diesel and Petrol Prices on GDP Growth: Evidence from China," ANU Working Papers in Economics and Econometrics 2023-690, Australian National University, College of Business and Economics, School of Economics.
    12. H.a. Mitchell‐innes & M.j. Aziakpono & A.p. Faure, 2007. "Inflation Targeting And The Fisher Effect In South Africa: An Empirical Investigation," South African Journal of Economics, Economic Society of South Africa, vol. 75(4), pages 693-707, December.
    13. Uwe Hassler & Jürgen Wolters, 2006. "Autoregressive distributed lag models and cointegration," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(1), pages 59-74, March.
    14. Muhammad, Anees & Ishfaq, Ahmed, 2011. "Industrial development, agricultural growth, urbanization and environmental Kuznets curve in Pakistan," MPRA Paper 33469, University Library of Munich, Germany.
    15. Liu, Dongwang & Yang, Ziqi, 2024. "Asymmetric linkages among fintech, oil prices, governance, and growth in Southeast Asian economies," Resources Policy, Elsevier, vol. 88(C).
    16. Jesser PALADINES, 2017. "Oil Price and Real GDP Growth of Ecuador: A Vector Autoregressive Approach," Journal of Economics and Political Economy, KSP Journals, vol. 4(1), pages 71-78, March.
    17. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 71037, University Library of Munich, Germany.
    18. Hondroyiannis, George, 2004. "Estimating residential demand for electricity in Greece," Energy Economics, Elsevier, vol. 26(3), pages 319-334, May.
    19. Ahmad Al-Harbi & Moid U. Ahmad, 2024. "Can Oil Prices Volatility Explain Economic Growth?," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 614-620, November.
    20. Fadeyi, O.A. & Ogundeji, A.A. & Willemse, B.J., 2015. "Establishing the linkages between the South African agricultural trade balance and macroeconomic indicators," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 53(4), March.

    More about this item

    Keywords

    Economic Growth; Crude Oil Price; OLS Model; Johansen Cointegration Test; Iraq;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q37 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Issues in International Trade
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    Statistics

    Access and download statistics

    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:pts:journl:y:2024:i:1:p:45-54. 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: Alina Hagiu (email available below). General contact details of provider: https://edirc.repec.org/data/fepitro.html .

    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.