Majumder, MK and Raghavan, M and Vespignani, J, Oil curse, economic growth and trade openness, Energy Economics, 91 ISSN 0140-9883 (2020) [Refereed Article]
© 2020 Published by Elsevier B.V.
An important economic paradox in the economic literature is that countries with abundant natural resources are poor in terms of real gross domestic product per capita. This paradox, known as the ‘resource curse’, is contrary to the conventional intuition that natural resources help to improve economic growth and prosperity. Using panel data for 95 countries, this study revisits the resource curse paradox in terms of oil resources abundance for the period 1980–2017. In addition, the study examines the role of trade openness in influencing the relationship between oil abundance and economic growth. The study finds trade openness is a possible avenue to reduce the resource curse, in our sample, trade openness reduces oil curse by around 25%. Trade openness allows countries to obtain competitive prices for their resources in the international market and access advanced technologies to extract resources more efficiently. Therefore, natural resource–rich economies can reduce the resource curse by increasing exposure to international trade.
|Item Type:||Refereed Article|
|Keywords:||oil rents, real GDP per capita, trade openness, dynamic panel data model, oil curse|
|Research Group:||Applied economics|
|Research Field:||Agricultural economics|
|Objective Division:||Economic Framework|
|Objective Group:||Measurement standards and calibration services|
|Objective Field:||Agricultural and environmental standards and calibrations|
|UTAS Author:||Majumder, MK (Mr Monoj Majumder)|
|UTAS Author:||Raghavan, M (Dr Mala Raghavan)|
|UTAS Author:||Vespignani, J (Associate Professor Joaquin Vespignani)|
|Web of Science® Times Cited:||8|
|Deposited By:||Economics and Finance|
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