What Drives the Economic Activity in the Oil-Producing Countries? An Empirical Evidence for Caspian Countries

Abstract This study investigates and assesses the economic activity in five Caspian states - Azerbaijan, Iran, Kazakhstan, Russia, Turkmenistan over period from 1998 to 2021. In this regard, we used GDP as dependent variable, while oil production, global price, natural gas exports, inflation were explanatory variables order investigate capture their impact on these energy-producing countries. terms of methodology, performed regression models often panel analysis Common Effects Model Fixed Model, also applied various robustness diagnostic tests, namely: F-test, Jarque-Bera test, Breusch- Pagan LM Test or Chow Test. Our results showed that provides a more accurate estimation (in GDP), since exports production have direct, positive statistically significant influence economies. For instance, 10% increase generates an level about 0.96% 3.12%. At same time, moderate direct correlations between inflation, well prices suggesting exert greater producer because oil’s role key input oil-exporting Furthermore, by applying Vector Error Correction model (VECM), our are not cointegrated per capita is influenced co-movements long-run. sense, policy implication would be develop intensive co-operation build new energy trade relationships Countries other energy-dependent countries, especially European Countries.