International Conference on Eurasian Economies
11-13 June 2019 – Famagusta, Turkish Republic of Northern Cyprus
Paper properties
Paper ID : 2310
Status : Paper published
Language : English
Topic : International Trade and Globalization
Presenter: Asst. Prof. Dr. Abdelhakim Embaya
Session : 4A Sectoral Analysis
The Comparative Advantage of Crude Oil in the Top 10 Oil-Producing Countries
The Comparative Advantage of Crude Oil in the Top 10 Oil-Producing Countries
- Dr. Osama Elsalih (Sabratha University, Libya)
- Assoc. Prof. Dr. Kamil Sertoğlu (Eastern Mediterranean University, TR of Northern Cyprus)
- Prof. Dr. Mustafa Besim (Eastern Mediterranean University, TR of Northern Cyprus)
- Asst. Prof. Dr. Abdelhakim Embaya (Sabratha University, Libya)
Abstract
This paper investigates the comparative advantage of crude oil in the top 10 oil-producing countries through computing the Normalized Revealed Comparative Advantage (NRCA) index and further examines the determinants of this advantage using panel estimation technique. The results of the NRCA index showed that during the study period of 27 years (1990-2016) not all the top10 oil-producing countries have a comparative advantage in crude oil production. Countries like Iran, Iraq, Kuwait, Russia, Saudi, and UAE are found to have a comparative advantage in producing crude oil, while countries like Brazil, China, and the USA have no comparative advantage in producing crude oil. For Canada, its comparative advantage is only revealed just between 2006 and 2016. The result of the Panel ARDL suggested that in the long run, crude oil price (COP) and daily average of crude oil production (DAP) are found to be positive and significantly related to NRCA, whereas proven reserve (PR) and domestic demand for oil (DDO) are negative and significantly related to NRCA. In the short run, COP, ADP, and DDO have the same effect as in the long run and significantly related to NRCA, while PR is statistically insignificant. Finally, a bidirectional Granger-causality is detected between the variables except for the PR and NRCA where a unidirectional causality runs from PR to NRCA.
JEL codes: Q35, Q37, F11
Elsalih, Osama, Sertoğlu, Kamil, Besim, Mustafa, Embaya, Abdelhakim (2019). "The Comparative Advantage of Crude Oil in the Top 10 Oil-Producing Countries" in Proceedings of International Conference of Eurasian Economies 2019, pp.118-125, Famagusta, Turkish Republic of Northern Cyprus.
DOI: https://doi.org/10.36880/C11.02310
