Oil discoveries and innovation

Raviro Mercy Mhuru, Toby Daglish and Heng Geng

Energy Economics, 2022, vol. 110, issue C

Abstract: This paper explores the effects of giant oil discoveries on innovation for a sample of 179 countries for the period 1975–2005. Evidence indicates that innovation activity slows down after oil discovery. Using a difference-in-differences design, we show that, on average, patent citations decline by 2.4% per year, and the number of actual patents slows down by approximately 2.5% per year. These results are consistent with the notion of the natural resource curse, a phenomenon where resource-rich economies have inferior growth performance relative to resource-poor economies. Cross-sectional analyses indicate that changes in innovation activities are greater in common law countries. We show that governance quality is a possible channel through which a decline in innovative activity occurs after a resource windfall.

Keywords: O31 Innovation and Invention: Processes and Incentives; O34 Intellectual Property and Intellectual Capital; Q33 Resource Booms; O57 Comparative Studies of Countries; Q32 Exhaustible Resources and Economic Development; O43 Institutions and Growth (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:110:y:2022:i:c:s0140988322001694

DOI: 10.1016/j.eneco.2022.105997

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