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Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques

This paper attempts to investigate if the effect of oil price on growth is asymmetrical for Malaysia, a small-open-dynamic oil-exporting country, over a period from 1981 to 2017. The empirical method employed in this study is the augmented autoregressive distributed lag model (ARDL) bound test appro...

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Main Authors: Kriskkumar, Karunanithi, Niaz Ahmad, Mohd Naseem, Wan Ngah, Wan Azman Saini
Format: Article
Published: Sage Publications 2022
Online Access:http://psasir.upm.edu.my/id/eprint/101977/
https://journals.sagepub.com/doi/full/10.1177/21582440221079936
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spelling my.upm.eprints.1019772023-08-11T08:39:32Z http://psasir.upm.edu.my/id/eprint/101977/ Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques Kriskkumar, Karunanithi Niaz Ahmad, Mohd Naseem Wan Ngah, Wan Azman Saini This paper attempts to investigate if the effect of oil price on growth is asymmetrical for Malaysia, a small-open-dynamic oil-exporting country, over a period from 1981 to 2017. The empirical method employed in this study is the augmented autoregressive distributed lag model (ARDL) bound test approach and the recent innovative nonlinear autoregressive distributed lag (NARDL) model. Results suggest that neglecting nonlinearities can lead to misleading results. More precisely, the result reveals that adjustments in the price of oil influence Malaysia’s economic growth asymmetrically. An increase and decrease in the price of oil strengthen the economic growth of Malaysia, demonstrating Malaysia’s ability to be both an oil-producing country and a trading nation. These results strongly imply that Malaysia is able to take advantage of changes in the oil price efficiently. Sage Publications 2022-03-10 Article PeerReviewed Kriskkumar, Karunanithi and Niaz Ahmad, Mohd Naseem and Wan Ngah, Wan Azman Saini (2022) Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques. Sage Open, 12 (1). pp. 1-17. ISSN 2158-2440 https://journals.sagepub.com/doi/full/10.1177/21582440221079936 10.1177/21582440221079936
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description This paper attempts to investigate if the effect of oil price on growth is asymmetrical for Malaysia, a small-open-dynamic oil-exporting country, over a period from 1981 to 2017. The empirical method employed in this study is the augmented autoregressive distributed lag model (ARDL) bound test approach and the recent innovative nonlinear autoregressive distributed lag (NARDL) model. Results suggest that neglecting nonlinearities can lead to misleading results. More precisely, the result reveals that adjustments in the price of oil influence Malaysia’s economic growth asymmetrically. An increase and decrease in the price of oil strengthen the economic growth of Malaysia, demonstrating Malaysia’s ability to be both an oil-producing country and a trading nation. These results strongly imply that Malaysia is able to take advantage of changes in the oil price efficiently.
format Article
author Kriskkumar, Karunanithi
Niaz Ahmad, Mohd Naseem
Wan Ngah, Wan Azman Saini
spellingShingle Kriskkumar, Karunanithi
Niaz Ahmad, Mohd Naseem
Wan Ngah, Wan Azman Saini
Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques
author_facet Kriskkumar, Karunanithi
Niaz Ahmad, Mohd Naseem
Wan Ngah, Wan Azman Saini
author_sort Kriskkumar, Karunanithi
title Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques
title_short Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques
title_full Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques
title_fullStr Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques
title_full_unstemmed Investigating the asymmetric effect of oil price on the economic growth in Malaysia: applying augmented ARDL and nonlinear ARDL techniques
title_sort investigating the asymmetric effect of oil price on the economic growth in malaysia: applying augmented ardl and nonlinear ardl techniques
publisher Sage Publications
publishDate 2022
url http://psasir.upm.edu.my/id/eprint/101977/
https://journals.sagepub.com/doi/full/10.1177/21582440221079936
_version_ 1775624504605671424
score 13.244367

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