Impact of oil prices on economic growth in Latin American oil exporting countries (1990-2014): A panel data analysis

This paper estimates the significance and sign of the impact of oil price changes on the GDP growth rate of a sample of net oil-exporting Latin American countries (Argentina, Colombia, Ecuador, Mexico and Venezuela), for the period 1990-2014. Most previous studies on the impact of oil price fluctuations on GDP growth were made for developed, net oil importing countries. By contrast, this study focuses on modeling the impact of oil price fluctuations on GDP growth rates of net oil exporting Latin American countries. Using annual data for the 1990-2014 period, pooled regression analysis and different panel data techniques, empirical results suggest that crude oil price fluctuations have a positive sign and a highly significant effect on the levels of economic activity for the sample countries. The importance of oil revenues for the public finances and for an important number of private companies, as well as the multiplier effects those activities have on economic activity validate the econometric results.