Winning the Oil Lottery: The Impact of Natural Resource Extraction on Growth

Tiago Cavalcanti, Daniel Da Mata and Frederik Toscani

No 2016/061, IMF Working Papers from International Monetary Fund

Abstract: This paper provides evidence of the causal impact of oil discoveries on development. Novel data on the drilling of 20,000 oil wells in Brazil allows us to exploit a quasi-experiment: Municipalities where oil was discovered constitute the treatment group, while municipalities with drilling but no discovery are the control group. The results show that oil discoveries significantly increase per capita GDP and urbanization. We find positive spillovers to non-oil sectors, specifically, an increase in services GDP which stems from higher output per worker. The results are consistent with greater local demand for non-tradable services driven by highly paid oil workers.

Keywords: WP; oil discovery; oil sector; oil municipality; oil worker; oil service; oil-producing firm; Oil and Gas; Economic Growth; Urbanization; oil deposit; oil MCAS; oil lottery; Oil; Oil production; Natural resources; Services sector; Manufacturing; Global (search for similar items in EconPapers)
Pages: 34
Date: 2016-03-14
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Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Winning the oil lottery: the impact of natural resource extraction on growth (2019)
Working Paper: Winning the Oil Lottery: The Impact of Natural Resource Extraction on Growth (2014)
Working Paper: Winning the Oil Lottery: The Impact of Natural Resource Extraction on Growth (2014)
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