Investigating the impact of oil revenues on the economic growth of the marginal countries of Persian Gulf with an emphasis on the financial development channel: a threshold panel model approach

Authors
farzaneh hassanitavabe 1
reza roshan 1
abdolkarim Hosseinpoor 2
1 Persian Gulf University
2 , Persian Gulf University
Abstract
The economic growth rate indicates changes in the level of economic activity and a country's ability to produce goods and services, which can be used as a measure to evaluate a country's economic performance and compare it with other countries. In the case of financial development, the ratio of financial assets to non-financial assets increases, which can have an impact on increasing economic growth.The purpose of this research is to investigate the impact of oil revenues on the economic growth of Persian Gulf countries with an emphasis on the financial development channel. The countries under study include: Iran, Qatar, Kuwait, Saudi Arabia, Iraq, Bahrain, and the United Arab Emirates, and the research period was from 2003 to 2023. For this purpose, a two-regime threshold panel regression model was used. The findings show that the effect of oil revenues on economic growth through the financial development where the level of financial deepening is less than the threshold level channel is positive and significant for the first regime, So that before reaching the threshold, one percent in oil revenues increases economic growth by 9.87 percent. For the second regime, that the dependence financial development channel on oil revenues is higher than the threshold level. It is not meaningful. Also, the control variables of trade openness, gross investment, inflation, government consumption expenditure have had a positive and significant impact on the economic growth of the mentioned countries.
Keywords
Oil revenue
Economic Growth
financial development
Marginal Countries of Persian Gulf
threshold panel
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