The Effect of Oil Price Shock on Technology Transfer in the OPEC Members by Panel VAR Model

Oil exporter countries have a high dependency on their oil income. In these countries, more than half of the public budget is supplied by oil exporting. These countries as developing countries are lacking knowledge and equipment; however, they have row material and cheap labor force. Previous studies and their experience have proven that increase in oil income by oil price shocks is not stable and it will decrease after one or more periods. Therefore, it is highly important to manage these excess incomes. The aim of this study is to find out the effects of oil price shock on technology transfer in OPEC members and its findings have been analyzed by VAR models and panel data. The results showed that oil price shocks have a positive effect on capital, intermediate goods import and FDI while R&D expenditure has been reduced. In addition, model convergence has been proven by VECM analysis and long term relation. Finally, coefficiency between capital, intermediate goods import and FDI lead to the fact that Import without FDI makes the model divergence, meaning that knowledge and management transfer is highly valued in technology transfer process and it is possible with using the FDI.