Revisiting purchasing power parity for major oil-exporting countries using panel SURADF tests

The panel Seemingly Unrelated Regressions Augmented Dickey-Fuller (SURADF) tests advanced by Breuer et al. (2001) are used to test the validity of Purchasing Power Parity (PPP) for eight major oil-exporting countries over the 1992:06 to 2008:02. Empirical results from several panel-based unit root tests indicate that PPP does not hold for eight major oil-exporting countries under study; however, Breuer et al.'s (2001) panel SURADF tests unequivocally indicate that PPP is valid for five countries with the exception of three countries, Kuwait, Nigeria and Saudi Arabia. These results have important policy implications for these eight oil-exporting countries under study.