Granger Causality Between Gross Domestic Product and Economic Sectors in Developing Countries: A Panel Co-integration Approach
Abstract
The purpose of this article is to explore the causal relationship between GDP and economic sectors including agricultural, industrial, and services growth and oil price using a balanced panel data of 62 developing countries observed over the period of 1990 to 2014. The results of multiple regressions show that industrial and services value-added share of GDP and oil price are the positive influencing factor of the GDP of developing countries. In contrast, agricultural value-added share of GDP identifies as a negative influencing factor of the GDP. To examine the Granger causal relationship between variables, the vector error correction model (VECM) and Wald tests statistics are applied. The findings show a long run relationship of Granger causality between variables and show a short run bi-directional Granger causality between GDP and agriculture and service and oil price and a short run unidirectional Granger-causality from industry to GDP.Keywords: Economic sectors, Oil price, Developing countries, Panel Co-integration, Granger-causalityJEL Classifications: O1; O13; O14; C33Downloads
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Published
2017-10-31
How to Cite
Siami-Namini, S. (2017). Granger Causality Between Gross Domestic Product and Economic Sectors in Developing Countries: A Panel Co-integration Approach. International Journal of Economics and Financial Issues, 7(5), 53–58. Retrieved from https://econjournals.com/index.php/ijefi/article/view/5229
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