An empirical note on comparison between resource abundance and resource dependence in resource abundant countries

This study explores the relative effects of natural resource abundance and natural resource dependence on economic growth for the period of 1980–2015 in 35 natural resource abundant countries. For this purpose, the relationship between economic growth, natural resource rents per capita, natural reso...

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Bibliographic Details
Published in:Resources policy 2019-03, Vol.60, p.47-55
Main Authors: Shahbaz, Muhammad, Destek, Mehmet Akif, Okumus, Ilyas, Sinha, Avik
Format: Article
Language:English
Subjects:
Capital
Comparative studies
Cross-sectional dependence
Data analysis
Dependence
Economic activity
Economic conditions
Economic development
Economic growth
Economic models
Economics
GDP
Gross Domestic Product
Natural resource abundance
Natural resource dependence
Natural resources
Openness
Panel data
Rents
Second generation
Time series
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Summary:This study explores the relative effects of natural resource abundance and natural resource dependence on economic growth for the period of 1980–2015 in 35 natural resource abundant countries. For this purpose, the relationship between economic growth, natural resource rents per capita, natural resource rents share of gross domestic product, capital, trade openness and financial development is examined. In doing so, we utilized with second generation panel data methodologies to take into account the cross-sectional dependence among countries. Our results show the existence of cointegration between the variables. Moreover, natural resource abundance promotes economic growth but natural resource dependence prevents economic activity. This study provides guidelines to utilise natural resources as economic tool to maintain economic development for longer period of time. •Resource abundance and resource dependence is compared in 35 countries. •Cross-sectional dependence exists among countries for all variables. •Natural resource abundance positively affects economic growth. •Natural resource dependence negatively affects economic growth.
ISSN:0301-4207
1873-7641
DOI:10.1016/j.resourpol.2018.12.002