The Economic and Non-Economic Determinants of Economic Growth in Oil-Exporting Arab Countries
International Journal of Business and Economics Research
Volume 8, Issue 3, June 2019, Pages: 142-152
Received: May 8, 2019; Accepted: Jun. 10, 2019; Published: Jun. 26, 2019
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Elham Mohammad Alhaj Yousef, Business Economics Department, Faculty of Business, University of Jordan, Amman, Jordan
Taleb Awad Warrad, Business Economics Department, Faculty of Business, University of Jordan, Amman, Jordan
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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.
Economic Growth, Arab Countries, Governance, Trade Openness
To cite this article
Elham Mohammad Alhaj Yousef, Taleb Awad Warrad, The Economic and Non-Economic Determinants of Economic Growth in Oil-Exporting Arab Countries, International Journal of Business and Economics Research. Vol. 8, No. 3, 2019, pp. 142-152. doi: 10.11648/j.ijber.20190803.18
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