Empirical Evidence on the Resource Curse Hypothesis in Oil Abundant Economy

Saqlain Latif Satti, Abdul Farooq and Muhammad Shahbaz

MPRA Paper from University Library of Munich, Germany

Abstract: This present study investigates the relationship between natural resource abundance and economic growth in Venezuelan economy. We have applied the ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001) to examine long run relationship between the variables. The VECM Granger causality is applied to test the direction of causality between the variables. The present study covers the period of 1971-2011. Our empirical evidence indicated that variables are found to be cointegrated. The results confirm that natural resource abundance impedes economic growth. Financial development, capital stock and trade openness enhance economic growth. The feedback hypothesis is also found between natural resource abundance and economic growth.

Keywords: natural resource abundance; economic growth; cointegration (search for similar items in EconPapers)
JEL-codes: C3 (search for similar items in EconPapers)
Date: 2013-09-11, Revised 2013-09-20
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-ene, nep-fdg and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Empirical evidence on the resource curse hypothesis in oil abundant economy (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:50150

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