TY - JOUR
T1 - Trade linkages and transmission of oil price fluctuations
AU - Taghi Zadeh Hesary, Farhad
AU - Yoshino, Naoyuki
AU - Rasoulinezhad, E.
AU - Chang, Youngho
PY - 2019/10/1
Y1 - 2019/10/1
N2 - This study is an attempt to ascertain how oil price shock can affect a trade-linked system via monetary variables. To this end, a simultaneous equation model (SEM) was applied through a Weighted Two Stage Least Squares (W2SLS) estimation method to different countries (21 cases) with business relations over the period from Q1 2000 to Q4 2015. In the case of oil-exporting countries—consisting of Iran, Russian Federation, UAE, Indonesia, and Kazakhstan—the findings revealed that they totally benefit from oil price increases. In the case of oil-importing countries, the effects are more diverse. To derive a better interpretation, we divided them into four groups: European Union (EU) members (Germany, Italy, the Netherlands, and Poland); East Asian nations (Japan; People's Republic of China; Republic of Korea; Viet Nam; Taipei China; Singapore; and Hong Kong, China); Commonwealth of Independent States (CIS) (Ukraine and Belarus) and others (the United States, India, and Turkey). The results showed that all these countries importing oil face a negative supply shock, except Turkey which benefits directly from an oil price shock. Furthermore, the indirect effect coefficient received through trade for all these countries was positive.
AB - This study is an attempt to ascertain how oil price shock can affect a trade-linked system via monetary variables. To this end, a simultaneous equation model (SEM) was applied through a Weighted Two Stage Least Squares (W2SLS) estimation method to different countries (21 cases) with business relations over the period from Q1 2000 to Q4 2015. In the case of oil-exporting countries—consisting of Iran, Russian Federation, UAE, Indonesia, and Kazakhstan—the findings revealed that they totally benefit from oil price increases. In the case of oil-importing countries, the effects are more diverse. To derive a better interpretation, we divided them into four groups: European Union (EU) members (Germany, Italy, the Netherlands, and Poland); East Asian nations (Japan; People's Republic of China; Republic of Korea; Viet Nam; Taipei China; Singapore; and Hong Kong, China); Commonwealth of Independent States (CIS) (Ukraine and Belarus) and others (the United States, India, and Turkey). The results showed that all these countries importing oil face a negative supply shock, except Turkey which benefits directly from an oil price shock. Furthermore, the indirect effect coefficient received through trade for all these countries was positive.
KW - Crude oil price
KW - Direct and indirect effect of oil shocks
KW - Trade linkage
UR - http://www.scopus.com/inward/record.url?scp=85069572014&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85069572014&partnerID=8YFLogxK
U2 - 10.1016/j.enpol.2019.07.008
DO - 10.1016/j.enpol.2019.07.008
M3 - Article
AN - SCOPUS:85069572014
SN - 0301-4215
JO - Energy Policy
JF - Energy Policy
M1 - 110872
ER -