Abstract:

This study assessed the role of infrastructural development in inducing the determinants of international reserves accumulation among Organisation of Petroleum Exporting Countries (OPEC), covering the period of 11 years between 2008 and 2018. The dynamic panel data estimator and Generalised Method of Moment (GMM) model specification was adopted to solve endogeneity problem in the model.  The study controlled for infrastructural development such as access to electricity and number of road and railway routes. The results revealed that infrastructural development dwindles the link between international reserves and crude oil price (evidence also subsists for natural resource dependence). However, the GDP becomes a significant determinant of international reserves, following its interaction with infrastructural development.The interaction between access to electricity and crude oil price, foreign direct investment, exchange rate, economic crisis and gross domestic product show significant impact on international reserves at 1% each. However, the link between access to electricity and natural resource dependence has negative and insignificant impact on international reserves. The interaction between road and railway routs and crude oil price, foreign direct investment, natural resource dependence, economic crisis and gross domestic product have significant effect on international reserves at 1%, 5%, and 10% respectively while that of exchange rate show insignificant impact at different level of significance. In conclusion, infrastructural development stimulates the effect of crude oil price,GDP and mitigate the effect of FDI on international reserves accumulation. The study therefore recommends among others that all successive government of OPEC member states should expand their resources on infrastructural development in order to boost their productivity and attract more foreign direct investment.