Reconsidering the resource curse in oil-exporting countries

Mohsen Mehrara

Energy Policy, 2009, vol. 37, issue 3, 1165-1169

Abstract: While there is much evidence to support the resource curse hypothesis for resource-abundant countries, some studies have found that oil booms raise the economic growth of oil-exporting countries. This paper examines the issue of the existence of the threshold effects in the relationship between oil revenues and output growth in oil-exporting countries, applying panel regressions. The empirical results strongly suggest the existence of a threshold beyond which oil revenues growth exerts a negative effect on output. The results indicate that the threshold of growth rate of oil revenues above which oil revenues significantly slows growth is around 18-19% for oil-exporting countries. In contrast, linear estimation without any allowance for threshold effects would misleadingly imply that an increase in the oil revenues increase the economic growth rate. Failure to account for nonlinearities conceal the resource curse in these countries particularly during extreme oil booms as suggested in previous studies.

Keywords: Oil-exporting; countries; Oil; revenues; Threshold; level (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (49)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301-4215(08)00649-6
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:enepol:v:37:y:2009:i:3:p:1165-1169

Access Statistics for this article

Energy Policy is currently edited by N. France

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