Oil Curse, Economic Growth and Trade Openness

Joaquin Vespignani, Mala Raghavan () and Monoj Kumar Majumder ()
Additional contact information
Monoj Kumar Majumder: Tasmanian School of Business & Economics, University of Tasmania, http://www.utas.edu.au/business-and-economics
Authors registered in the RePEc Author Service: Monoj Kumar Majumder and Monoj Kumar Majumder

No 2019-06, Working Papers from University of Tasmania, Tasmanian School of Business and Economics

Abstract: An important economic paradox that frequently arises in the economic literature is that countries with abundant natural resources are poor in terms of real gross domestic product per capita. This paradox, known as the ‘resource curse’, is contrary to the conventional intuition that natural resources help to improve economic growth and prosperity. Using panel data for 95 countries, this study revisits the resource curse paradox in terms of oil resources abundance for the period 1980–2017. In addition, the study examines the role of trade openness in influencing the relationship between oil abundance and economic growth. The study finds that trade openness is a possible avenue to reduce the resource curse. Trade openness allows countries to obtain competitive prices for their resources in the international market and access advanced technologies to extract resources more efficiently. Therefore, natural resource–rich economies can reduce the resource curse by opening themselves to international trade.

Keywords: Oil rents; real GDP per capita; trade openness; dynamic panel data model (search for similar items in EconPapers)
JEL-codes: E23 F13 Q43 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2019
New Economics Papers: this item is included in nep-ene, nep-gro, nep-int, nep-mac and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published by the University of Tasmania. Discussion paper 2019-06

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Related works:
Journal Article: Oil curse, economic growth and trade openness (2020)
Working Paper: Oil curse, economic growth and trade openness (2019)
Working Paper: Oil Curse, Economic Growth and Trade Openness (2019)
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