Competitiveness analysis of the oil industry in the main Latin American oil countries, 1996-2017

The objective of this research is to analyze the main determinants of competitiveness in the oil industry in the main Latin American oil countries during the period 1996-2017. For this purpose, panel data econometric methods are applied in this research, namely, cross-section dependence (Pesaran), second generation unit root, cointegration (Kao and Fisher–Johansen), and heterogeneous causality tests (Hurlin and Dumitrescu). In this way, it is demonstrated that most of the variables are characterized by a cross-section dependence and there is evidence of cointegration relationships between the variables in the long term. Using the estimator Fully Modified OLS (FMOLS), it is determined that there is a positive relationship between competitiveness and oil barrel production, referring to the fact that an increase in oil barrel production creates an increase in competitiveness, while there is a negative relationship between competitiveness with the real exchange rate and the crude oil barrel price, referring to an increase in the real exchange rate and the oil barrel price in each country generate a decrease in the competitiveness of the oil industry.