Natural resource and entrepreneurship: Economic freedom matters

Paul Awoa Awoa, Jean Cedric Oyono, Bénédicte Ngah Atangana, Donald Okere Atanga and Inès Perolde Zeh

Resources Policy, 2022, vol. 79, issue C

Abstract: This paper sheds new light on the relationship between resource rents and entrepreneurship, conditional on economic freedom. In a sample of 101 countries, we demonstrate that resource rents encourage people to engage in counterproductive activities by lowering new business density when economic freedom is low. The findings hold up well to a variety of measures as well as forms of resource rents and economic freedom indicators. Additionally, in an effort to establish a threshold for economic freedom, a robustness test using the dynamic panel threshold approach shows that resource rents have asymmetric impacts on entrepreneurship both below and above a value of 7. Therefore, when economic freedom is low, resource rents enhance the incentive to choose rent-seeking activities (bribery, theft, and lobbying) over productive ones, leading to a diversion from the best use of resources and a lack of entrepreneurial spirit.

Keywords: Natural resource; Economic Freedom; Entrepreneurship; Threshold effect (search for similar items in EconPapers)
JEL-codes: C14 L26 L51 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420722005578
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:79:y:2022:i:c:s0301420722005578

DOI: 10.1016/j.resourpol.2022.103114

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().