The effect of oil discovery in Brazil: A synthetic control approach

Marcelo Bittencourt Coelho dos Santos, Marcelo Cabus Klotzle and Rafael Baptista Palazzi

Resources Policy, 2024, vol. 92, issue C

Abstract: This study explores the economic impact of Brazil's discovery in 2006 of significant deepwater pre-salt oil reserves. Employing a synthetic control approach using counterfactual data from comparable nations, we estimate the influence on Brazil's real per capita GDP for 2006–2014. Our analysis reveals that the oil discovery resulted in an annual increase of approximately USD 100 in real GDP per capita, with the growth effects commencing in 2008 and gradually waning by 2014. These findings contribute to a deeper understanding of the economic implications of oil discovery in the Brazilian context, providing valuable insights for investors and policymakers making strategic energy policy.

Keywords: Counterfactual analysis; Comparative case studies; Economic growth; Natural resources; Synthetic control; Pre-salt (search for similar items in EconPapers)
JEL-codes: F43 O11 O13 O40 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:92:y:2024:i:c:s0301420724004008

DOI: 10.1016/j.resourpol.2024.105033

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