Open AccessThe Effect of Crude Oil Prices and Internet on Economic Growth in Timor Leste
Author(s) -
Wali Aya Rumbia,
Abd Azis Muthalib,
Pasrun Adam,
Asrul Jabani,
Yuwanda Purnamasari Pasrun,
Dzulfikri Azis Muthalib
Publication year - 2022
Publication title -
international journal of energy economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.449
H-Index - 33
ISSN - 2146-4553
DOI - 10.32479/ijeep.11992
Subject(s) - cointegration , economics , distributed lag , endowment , crude oil , the internet , error correction model , real gross domestic product , short run , monetary economics , econometrics , philosophy , epistemology , world wide web , computer science , petroleum engineering , engineering
Continuous economic growth improves the welfare and the living standards of the people. However, for a country to experience economic growth, several factors come into play, including resource endowment, economic policies, political stability, and more. This research aimed to examine the effect of crude oil prices and internet on economic growth in Timor Leste. An autoregressive distributed lag model was used to analyze the time series data from 2005-2020. The cointegration test results showed that crude oil prices, internet, and economic growth are cointegrated. Based on the model coefficients, the estimation results revealed crude oil prices and internet have a significant effect on the country's long-term and short-term economic growth. The long-term effect of crude oil prices on economic growth is negative. In every 1% increase of crude oil prices, there is a 10.3% decrease in economic growth. A 1% reduction in crude oil prices leads to a 10.3% economic growth. Furthermore, the long-term effect of the internet has a long-term positive effect on economic growth. Every 1% internet increase, there is a corresponding 27.65% increase in economic growth.