Are natural resource volatility curses or blessings for economic performance? Stories of resource-rich regions

Qi Wang and Li Zhang

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: This paper analyses the time-varying and non-linear effects of natural resource volatility on economic growth in 10 countries using the smooth transition regression (STR) model and further examines the long-run and short-run relationships using the autoregressive distributed lag (ARDL) cointegration approach. The conclusions exhibit that natural resource rents are linearly and non-linearly associated with economic growth in countries with different levels of economic development, and display long-term cointegration and short-term equilibrium state. This study provides guidance for policymakers to implement long-term and short-term management strategies when considering national development differences.

Keywords: Natural resources; Economic performance; STR model; ARDL model (search for similar items in EconPapers)
JEL-codes: B41 C22 C53 R11 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012698

DOI: 10.1016/j.frl.2024.106240

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