Empirical Analysis Of Energy Use,Oil Price Fluctuations,and Economic Growth In The MENA Net Oil-Exporting And Importing Countries

Investigating the stochastic convergence of energy consumption per capita and its catch-up rate is important for policies in energy demand and supply as well as environmental management.For instance,if energy consumption is level stationary,then shocks to the global energy market will have a temporary or transitory effect on energy.At the same time,if energy consumption contains a unit root and thus stochastically divergent,then shocks to the global energy market will have a permanent and long-run effect on energy consumption,whereas,if the energy consumption is stochastically convergent,it might use its past trend to forecast energy demand.If it is stochastically divergent,then the past behavior of energy consumption is useless for predicting future energy demand.Moreover,the production and consumption of energy go hand in hand,as energy is the crucial factor in the industrial production and manufacturing sector,and it is incredible for the industrial sector to function without the use of energy.Hence,the coming of this study to investigate the stochastic convergence of disaggregated energy consumption per capita and its catch-up rate: an independent analysis of the MENA net oil-exporting and importing countries,to examine the long-run and short-run dynamics of disaggregated energy use,oil price fluctuations,and economic growth in net oil-importing the MENA countries,and to analyze the asymmetric impact of disaggregated energy consumption and oil price fluctuation on the MENA net oil-exporting and importing economies.For the first objective,panel data for the Middle East and North Africa(MENA)countries both the net oil-exporting and importing countries on non-renewable energy consumption per capita,and renewable energy consumption per capita as well as the respective catch-up rate of the net oil-importing with reference to the net oil-exporting from 1990 – 2016 used in this study.The techniques employed include advances in unit root tests such as the Carrioni-Silvestre,Barrio-Castro,and Lopez-Bazo(2005)panel KPSS unit root test with structural breaks,Lee,Strazicich,Meng(2012),and Residual Augmented Least Squares-Lagrange multiplier(RALS-LM)unit root test with structural breaks also called “RALS-LM test with trend breaks and non-normal errors” introduced by Meng,Lee,Payne(2017).From the panel analysis,the findings revealed that,there is stochastic convergence of disaggregated energy consumption per capita and its catch-up rate in the panel of the MENA net oil-exporting and importing countries,and in majority of the countries when the countries where individually observed.For the second objective,panel data for the net oil-importing the Middle East and North Africa(MENA)countries on non-renewable energy consumption per capita,renewable energy consumption per capita,oil prices,and real GDP from 1990 – 2016 used in this study.The methods employed include the Panel Fully Modified Ordinary Least Squares(PFMOLS)technique,Panel Dynamic Ordinary Least Squares(PDOLS)technique,for the estimation of the long-run coefficients,Panel Vector Error Correction Model(PVECM)to examine the short-run dynamics.The findings confirmed that a rise in non-renewable energy use is stimulating the economies of the member states,but oil price fluctuations are influencing it only in the long run while in both terms the impact of renewable energy use is trivial in promoting the economies.Also,in both terms,oil price fluctuations are determinant of non-renewable energy use but only in the short-run for renewable energy use.For the third objective,panel data for Middle East and North Africa(MENA)countries both the net oil-exporting and importing countries on non-renewable energy consumption per capita,renewable energy consumption per capita,oil prices,and real GDP from 1990 – 2016 used in this study.The approach employed includes the Panel Nonlinear Autoregressive Distributed Lag(PNARDL)model developed from Shin et al.(2014).The findings discovered that,for the net oil-exporting countries,the results show that,in the long-run,the impact of non-renewable energy,renewable energy,and oil price fluctuations for the net-oil exporting countries is asymmetric but symmetric in the short run.In addition,in the long-run,increase and decrease in non-renewable energy consumption are stimulating and retarding the economic growth of the net oil-exporting countries,while increase and decrease in oil price fluctuations and that of renewable energy consumption are retarding and stimulating it,respectively.However,in the short run none of the variables has significant impact.This shows that only in the long run the variables are affecting the economies where an increase in non-renewable energy consumption and decrease in oil price fluctuations(stability in oil prices)is promoting the economic growth of the net-oil exporting countries,while increase in renewable energy is negligible in promoting the economic growth of the countries.On the other side,for the net oil-importing countries,in the long run,only renewable energy is asymmetric while in the short run none of the variables.Furthermore,in the long-run,increase and decrease in non-renewable energy consumption and that of oil price fluctuations are stimulating the economic growth of the net oil-importing countries,while decrease(as the coefficient of increase was dropped due to the multicollinearity problem)in renewable energy consumption is retarding the economies which technically means that it is increase is promoting the economies(thus,increase and decrease in renewable energy use is prmoting and retarding the economies).Even though,using linear techniques(Panels FOLS and Panel DOLS models)show that it is negotiable in promoting the economies,such assertion has to be dropped because this nonlinear technique(Panel Nonlinear ARDL model)is more advanced and sophisticated.However,in the short run,only increase in oil price fluctuations(instability in oil prices)is promoting the economic growth of the countries;likely due the fact that such fluctuations(instability)result to low oil prices which will be an advantage to the net-oil importing countries.This shows that,in the long run,increase and decrease in non-renewable energy and oil-price fluctuations are encouraging the economies while increase and decrease in renewable energy are encouraging and retarding the economies,respectively.However,in the short run,only increase in oil price fluctuation(instability in oil prices)is promoting the economic growth of the net-oil importing countries.