Effect of The Oil Prices on The Industrial Production In Oil-Dependent Countries: Panel Cointegration Application

Petroleum is an important source of economic growth and development. Used in the industrial production of non-renewable energy sources like oil in the energy supply it means to be influenced by changes in oil prices. The purpose is to investigate the impact on the oil-dependent country’s industrial production changes in oil prices. Long-term relationship between crude oil price per barrel and industrial production index of the most oil-importing 15 countries is analyzed by Pedroni(1999), Kao(1999) and Johanser Fisher cointegration tests. Quarterly data from 2000-2015 is used in the study and the long term relationship between these two variables is found that is statistically significant and positive. Then FMOLS and DOLS methods is applied for inference about the long-term relationship between crude oil price for barrel and industrial production index and coefficients are estimated to be at 0.47 in both methods