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Natural resource access and local economic growth

Mark Gradstein and Marc Klemp ()

European Economic Review, 2020, vol. 127, issue C

Abstract: We explore the existence of a local “resource curse” related to Brazil's oil, using oil price annual changes interacted with measures of local proximity to oil reserves. We find that oil royalty-receiving locations in Brazil that are closer to an oil field are characterized by a higher level of income per capita, when controlling for a range of potentially confounding factors. Furthermore, in a panel setting, we find that better geographical access to oil fields generates a greater positive effect of oil prices on local income per capita. Moreover, this positive impact of oilfield proximity on the effect of oil prices is enhanced in oil rich states. Importantly, these effects appear to be independent of the amount of oil royalties, suggesting the role of an indirect linkage effect.

Keywords: Local resource curse; Resource access; Oil price shocks (search for similar items in EconPapers)
JEL-codes: O11 O13 Q33 R11 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:127:y:2020:i:c:s0014292120300738

DOI: 10.1016/j.euroecorev.2020.103441

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European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

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