RESOURCE DEPENDENCE, KNOWLEDGE CREATION, AND GROWTH: REVISITING THE NATURAL RESOURCE CURSE

Heinz Welsch

Journal of Economic Development, 2008, vol. 33, issue 1, 45-70

Abstract: Several explanations have been put forward for the phenomenon - referred to as ¡®curse of natural resources¡¯ - that resource-rich countries tend to display low rates of economic growth. This paper studies an R&D-related explanation, using an endogenous growth model with natural resources and R&D-based technological change. For suitable values of preference parameters, the model predicts that knowledge creation as well as capital formation are inversely related to natural-resource intensity, thus providing an explanation for the ¡®curse¡¯. Estimation results on cross-sectional data for 77 countries (1965-1998) are consistent with these predictions. Basic results of the paper remain valid when institutional aspects (corruption, democracy) are included.

Keywords: Endogenous Technological Change; Economic Growth; Natural Resource Curse; Natural Resources (search for similar items in EconPapers)
JEL-codes: O3 O4 Q3 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:33:y:2008:i:1:p:45-70

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