28Jul 2017

CAUSAL RELATIONSHIP BETWEEN DROP IN OIL PRICE, FOREIGN DIRECT INVESTMENT AND INFLATION: A COMPARATIVE STUDY OF NET EXPORTER AND NET IMPORTER OF OIL.

  • College of Management Sciences Michael Okpara University, Umudike.
  • Faculty of Management and Social Sciences, Department of Accounting and Finance Godfrey Okoye University, Enugu.
Crossref Cited-by Linking logo
  • Abstract
  • Keywords
  • References
  • Cite This Article as
  • Corresponding Author

We explored a comparative analysis of the causal relationship between drop in oil price, FDI and inflation using India and Nigeria as case net importer of oil and net exporter of oil respectively. Granger Causality Test analytical method was employed using a regression model. Findings revealed that drop in oil price has not significantly caused the increase in consumer spending in India and Nigeria and that drop in oil price has not significantly caused the drop in foreign cash inflow in India while it was found to have caused a drop in foreign cash inflow in Nigeria. It was recommended that Nigeria as a mono-product economy should start adjusting to exploit other natural resources in the nation to cushion the economic hassle overdependence on oil have forced it into

  1. Abubakar, A., 2015. The Impact of Global Fall in Oil Prices on the Nigerian Crude Oil Revenue and Its Prices. Dubai-UAE, Proceedings of the Second Middle East Conference on Global Business, Economics, Finance and Banking.
  2. Akide, A., 2007. Growth implications of oil price variations: A case study of Nigeria. Volume 8, No 2, pp. 20-27.
  3. Aliyu, S., and Usman, R., 2009. Impact of Oil Price Shock and Exchange Rate Volatility on Economic Growth in Nigeria: An Empirical Investigation. Journal of International Studies. Issue 11, pp 4-15.
  4. Amadeo, K., 2016. Crude Oil Prices: Trends and Impact on the Economy and You. [Online] Available at: https://www.thebalance.com/crude-oil-prices-trends-and-impact-on-the-economy-and-you-3305738 [Accessed 20 January 2017].
  5. Ani, W., Ugwunta, D., Oliver, I., Eneje, B., 2014. Oil price volatility and economic development: Stylized evidence in Nigeria. Journal of Economics International Finance. Retrieved from http://www.academicjournals.org/JEIF
  6. Aremo, G. A., Orisadare, M. A., Ekperiware, C. M., 2012. Oil price shocks and fiscal policy management: Implications for Nigerian economic planning (1980-2009). International Journal of Development Sustainability, Volume 1, No 3
  7. Cunningham, N., 2017. Citi Sees $65 Oil By Christmas. [Online] Available at: http://oilprice.com/Energy/Oil-Prices/Citi-Sees-65-Oil-By-Christmas.html [Accessed 20 April 2017].
  8. ENL, 2016. Why Do Crude Oil Prices Matter A Lot To Indian Economy?. [Online] Available at: http://energynewslink.com/why-do-crude-oil-prices-matter-a-lot-to-indian-economy/ [Accessed 20 January 2017].
  9. Ferderer, J., 1996. Oil price volatility and the macro economy. Journal of Macroeconomics, Volume 18, No. 2, pp. 1-26
  10. Igberaese, T., 2013. The effect of oil dependency on Nigeria?s economic growth. Int. Inst. Soc. Stud., Netherlands, pp. 1-49.
  11. Kumar, S., 2016. Why do crude oil prices matter a lot to Indian economy?. [Online] Available at: http://www.moneycontrol.com/news/commodity/why-do-crude-oil-prices-matterlot-to-indian-economy_6459121.html [Accessed 6 January 2017].
  12. Mark, G., T. Olsen and Y. Mysen, 1994. Impact of oil price variation on the growth prospects of African economies. African Economic Writer?s Publication, Volume 2, No 5, pp. 80-83.
  13. Obasi, N. O., 2016. The Oil Price Fall and the Impact on the Nigerian Economy: A call for Diversification. Journal of Law, Policy and Globalization, Volume 28, pp. 84-93.
  14. Onwumere, J. U. J. (2009). Business and Economic Research Methods. 2nd Edition ed. Enugu, Nigeria: Vougasen Limited
  15. Oriakhi, D. E., and Osaze, I. D., 2013. Oil price volatility and its consequences on the growth of the Nigerian economy from 1970 to 2010. Asian Economics Financial Review, Volume 3 Issue 5, pp. 683-702
  16. Sala-i-Martin, X., & Subramanian, A., 2003. Addressing the Natural Resource Curse: An Illustration from Nigeria (No. W9804). National Bureau of Economic Research.
  17. Singh, S. K., 2016. Blessing or Curse? The Impact of Global Crude Oil Prices on India's Industry. [Online] Available at: http://www.process-worldwide.com/blessing-or-curse-the-impact-of-global-crude-oil-prices-on-indias-industry-a-512076/ [Accessed 5 January 2017].
  18. ThankGod, A. O., & Maxwell, I. A., 2013. The effects of oil price shocks on monetary policy in Nigeria. International Review of Social Sciences and Humanities, Volume 5, No. 1, pp. 58-66.
  19. Ugbam, O. (2001). Quantitative Techniques: An Introductory Text. First ed. Enugu: Chirol Publishers.

[Eyisi Adanma Sabina and Titus Freeman Ifeanyi. (2017); CAUSAL RELATIONSHIP BETWEEN DROP IN OIL PRICE, FOREIGN DIRECT INVESTMENT AND INFLATION: A COMPARATIVE STUDY OF NET EXPORTER AND NET IMPORTER OF OIL. Int. J. of Adv. Res. 5 (Jul). 1993-1999] (ISSN 2320-5407). www.journalijar.com

Prof. Eyisi Adanma Sabina
College of Management Sciences, Michael Okpara University, Umudike

DOI:

Article DOI: 10.21474/IJAR01/4933      
DOI URL: http://dx.doi.org/10.21474/IJAR01/4933

Download Full Paper

Download PDF No. of Downloads: 11 | No. of Views: 65