Investigating the Effects of Natural Resource Rents on Economic Growth in Major Natural Resource-Exporting Countries: A Quantile Regression Approach
Subject Areas : EconomicGhodratollah Emamverdi 1 , Akram Ghavami 2 , AliAkbar KhoraviNejad 3 , CT.C. Aminrashti 4
1 - Assistant professor of Economics at Islamic Azad university ,Central Tehran Branch
2 - Department of Economics, CT.C., Islamic Azad University, Tehran, Iran
3 - Department of Economics, CT.C., Islamic Azad University, Tehran, Iran.
4 - Department of Economics, CT.C., Islamic Azad University, Tehran, Iran.
Keywords: Natural Resource Rents, Economic Growth, Quantile Regression.,
Abstract :
The examination of the effects of natural resource rents on economic growth has been a challenging topic in the literature on natural resource economics. Natural resource rents significantly influence economic growth by providing governments with revenues that can be invested in infrastructure, education, and health, thereby promoting development. However, the mismanagement of these rents can lead to the resource curse, where economies become overly dependent on commodities, resulting in volatility and underdevelopment. Understanding the dynamics of natural resource rents is crucial for policymakers to optimize benefits while mitigating risks. Studies in this area help identify sustainable practices and effective management strategies that can transform resource wealth into long-term prosperity. Ultimately, analyzing natural resource rents is vital for achieving balanced and inclusive economic growth. Given this context, the main objective of this study was to examine the effects of natural resource rents in major resource-exporting countries (20 countries) over the period 2000–2022 using a quantile regression approach. The findings from both fixed-effects estimation and quantile regression indicated that natural resource rents have a positive and significant effect on economic growth. Moreover, based on the quantile regression results, the impact of natural resource rents on economic growth decreases at higher quantiles of economic growth. In other words, in countries with higher economic growth, the effect of natural resource rents on growth is weaker compared to countries with lower economic growth.
منابع:
Acemoglu, D., Johnson, S., & Robinson, J. A. (2021). The colonial origins of comparative development: An empirical investigation. The American Economic Review, 91(5), 1369–1401.
Adika, G. (2020). Economic growth dynamics between resource‐rich and resource‐poor countries in sub-Saharan Africa: The role of politics and institutions. African Development Review, 32(3), 303–315.
Akpa, A. F. (2023). Effect of natural resources rents on income inequality in sub-Saharan Africa: Exploring the direct and indirect transmission mechanisms. International Journal of Development Issues, 22, 167–181.
Alhassan, H., & Kwakwa, P. A. (2023). The effect of natural resources extraction and public debt on environmental sustainability. Management of Environmental Quality, 34(3), 605–623. https://doi.org/10.1108/MEQ-07-2022-0192
Aljarallah, R. A., & Angus, A. (2020). Dilemma of natural resource abundance: A case study of Kuwait. SAGE Open, 10(1), 1–24.
Auty, R. M. (Ed.). (2001). Resource abundance and economic development. Oxford University Press.
Awartani, B., Aktham, M., & Cherif, G. (2020). The connectedness between crude oil and financial markets: Evidence from implied volatility indices. Journal of Commodity Markets, 4, 56–69.
Ayres, R., Castaneda, B., Cleveland, C., Costanza, R., Daly, H., Folke, C., Hannon, B., Harris, J., Kaufmann, R., Lin, X., Norgaard, R., Ruth, M., Spreng, D., Stern, D., & Van den Bergh, J. (1997). Natural capital, human capital, and sustainable economic growth. Boston University.
Bah, C. M. (2016). Economic growth, institutions and the natural resource curse in Sierra Leone: An empirical investigation. International Journal of Business and Social Sciences, 7(5), 100–124.
Barbier, E. B. (2015). Natural resources and economic development. Cambridge University Press.
Bong, A., & Premaratne, G. (2018). Regional integration and economic growth in Southeast Asia. Global Business Review, 19(6), 1403–1415.
Caldara, D., & Iacoviello, M. (2022). Measuring geopolitical risk. American Economic Review, 112, 1194–1225.
Chang, Y., Huang, Y., Li, M., & Duan, Z. (2021). Threshold effect in the relationship between environmental regulations and haze pollution. International Journal of Environmental Research and Public Health, 18, 124–138.
Chernozhukov, V., & Hansen, C. (2014). An IV model of quantile treatment effects. Econometrica, 73(3), 1225–1246.
Creswell, J. W. (2018). Research design: Qualitative, quantitative, and mixed methods approaches. Sage.
Ding, R. (2021). Economic growth: The theoretical debate on resources, the environment and growth limits. China Political Economy, 4, 2–13.
Dinh, H. T., & Dinh, R. (2016). Managing natural resources for growth and prosperity in low-income countries. OCP Policy Center.
Fagbemi, F., & Adeoye, G. O. (2020). Nigerian governance challenge: Exploring the role of natural resource rents. Global Journal of Emerging Market Economies, 12(3), 335–358.
Gu, J., Umar, M., Soran, S., & Yue, X. G. (2020). Exacerbating effect of energy prices on resource curse: Can R&D be a mitigating factor? Resources Policy.
Havranek, T., Horvath, R., & Zeynalov, A. (2016). Natural resources and economic growth: A meta-analysis. World Development, 88, 134–151.
Hayat, A., & Tahir, M. (2019). Natural resources volatility and economic growth. MPRA Paper No. 92293.
Hayat, A., & Tahir, M. (2021). Foreign direct investment, natural resources and economic growth: A threshold model approach. Journal of Economic Studies, 48(5), 929–944.
He, X., & Wong, W. K. (2004). Quantile regression: An overview. Statistical Science, 19(4), 235–245.
Hu, X., Yao, G., & Zhou, T. (2022). Does ownership structure affect the optimal capital structure? International Journal of Financial Economics, 27, 2458–2480.
James, A. (2015). The resource curse: A statistical mirage? Journal of Development Economics, 114, 55–63.
Jha, S., Bhushan, S., & Nirola, N. (2022). Does geopolitical risk matter for economic growth? Management Studies, 18(3), 357–372.
Ji, K., Magnus, J. R., & Wang, W. (2014). Natural resources, institutional quality, and economic growth in China. Environmental and Resource Economics, 57(3), 323–343.
Koenker, R. (2005). Quantile regression. Cambridge University Press.
Koenker, R., & Bassett, G. (1978). Regression quantiles. Econometrica, 46(1), 33–50.
Kwakwa, P. A., Alhassan, H., & Adu, G. (2020). Effect of natural resources extraction on energy consumption and CO₂ emission in Ghana. International Journal of Energy Sector Management, 14(1), 20–39.
Lederman, D., & Maloney, W. (2016). Open questions about the link between natural resources and economic growth. World Bank Working Paper.
Li, B., Chang, C. P., Chu, Y., & Sui, B. (2020). Oil prices and geopolitical risks. Energy Environment.
Manuel, M., María, R. R., & Luis, A. G. (2023). The impact of geopolitical risk on oil prices and freight rates. Energy Policy.
Mosikari, T. J., & Eita, J. H. (2020). CO₂ emissions, urban population, energy consumption and economic growth. OPEC Energy Review, 44, 319–333.
Newey, W. K., & Powell, J. L. (1987). Asymmetric least squares estimation and testing. Econometrica, 55(4), 819–847.
Oumarou, Z. (2018). Natural resource and economic growth in Africa: The role of institutional quality and human capital. Journal of Resource Policy.
Oyinlola, M., Adeniyi, O., & Raheem, I. (2015). Natural resource abundance, institutions and economic growth in Africa. African Journal of Economic and Sustainable Development, 4(1), 34–48.
Pradhan, R. P., Arvin, M. B., & Nair, M. (2021). Urbanization, transportation infrastructure, ICT, and economic growth. Cities, 115, 103213.
Rahim, S., Murshed, M., Umarbeyli, S., Kirikkaleli, D., Ahmad, M., Tufail, M., & Wahab, S. (2021). Do natural resources abundance and human capital development promote economic growth? A study on the resource curse hypothesis in Next Eleven countries. Resources, Environment and Sustainability, 4, 100018.
Shabbir, A., Kousar, S., & Kousar, F. (2020). The role of natural resources in economic growth: New evidence from Pakistan. Journal of Economics, Finance and Administrative Science, 25(50), 221–238.
Shahbaz, M., Destek, M. A., Okumus, I., & Sinha, A. (2019). An empirical note on comparison between resource abundance and resource dependence in resource abundant countries. Resources Policy, 60, 47–55.
Shao, S., & Yang, L. (2014). Natural resource dependence, human capital accumulation, and economic growth: A combined explanation for the resource curse and the resource blessing. Energy Policy, 74, 632–642.
Su, C. W., Khan, K., Tao, R., & Umar, M. (2020). A review of resource curse burden on inflation in Venezuela. Energy, 204, 117–128.
Sweidan, O., & Elbargathi, K. (2022). The effect of oil rent on economic development in Saudi Arabia: Comparing the role of globalization and international geopolitical risk. Resources Policy, 75, 102–119.
Taguchi, H., & Lar, N. (2016). The resource curse hypothesis revisited: Evidence from Asian economies. Bulletin of Applied Economics, 3(2), 31–42.
Tahir, M., Burki, U., & Hayat, A. (2022). Natural resources and economic growth: Evidence from Brunei Darussalam. International Journal of Emerging Markets, 25, 176–193.
Topcu, E., Altinoz, B., & Aslan, A. (2020). Global evidence from the link between economic growth, natural resources, energy consumption, and gross capital formation. Resources Policy, 66, 101622.
Tran, B. L., Chen, C. C., & Tseng, W. C. (2022). Causality between energy consumption and economic growth in the presence of GDP threshold effect: Evidence from OECD countries. Energy, 251, 123–142.
Ulucak, R., Koçak, E., Erdoğan, S., & Kassouri, Y. (2020). Investigating the non-linear effects of globalization on material consumption in EU countries. Resources Policy, 67, 101119.
Vanhoudt, P. (1999). Did the European unification induce economic growth? In search of scale effects and persistent changes. Weltwirtschaftliches Archiv, 135(2), 193–220.
Wang, C., Lim, M. K., Zhang, X., Zhao, L., & Lee, P. T. W. (2020). Railway and road infrastructure in the Belt and Road Initiative countries: Estimating the impact of transport infrastructure on economic growth. Transportation Research Part A: Policy and Practice, 134.
Wen, J., Mughal, N., Kashif, M., Jain, V., Meza, C. S. R., Cong, P. T., & others. (2022). Volatility in natural resources prices and economic performance: Evidence from BRICS economies. Resources Policy, 75, 102–119.
Zhang, H., & Chen, S. (2022). Overview of research on marine resources and economic development. Marine Economics and Management, 5(1), 69–83.
