This paper extends the literature on the effects of oil-price shocks using United States, Norway and South Africa as case studies between 1980 and 2010. The Structural Vector Autoregressive (SVAR) and Panel VAR methodologies are employed as an extension to the conventional unrestricted Vector Autoregressive (VAR) model. Results show that the developed economies (United States and Norway) stick to the non-linear oil-price shock specifications as argued in the literature. However, these are not feasible within the context of the emerging net-oil importing economy. Furthermore, Structural Vector Autoregressive (SVAR) model decisively restricts the oil-price shock effects while the effects intended to be captured may have been overruled by the identification restrictions imposed. Nevertheless, the Panel VAR methodology is able to accommodate all oil-price shock specifications. The claim that there exists a transmission mechanism through which positive oil price shock accruals can be beneficial to the global community was empirically verified using Foreign Direct Investment (FDI) as a proxy. In the other way round, there is suggestive evidence of possible unprecedented and unsatisfactory effects during negative oil-price shock periods.
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