Spatial Nexus: Natural Resources and Economic Growth

Mingze Marcellus Li (), Thanasis Stengos and Yiguo Sun
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Mingze Marcellus Li: University of Guelph
Yiguo Sun: University of Guelph

Empirical Economics, 2025, vol. 69, issue 3, No 2, 1117-1152

Abstract: Abstract The “Resource Curse" phenomenon has been a central theme in resource economic research over the past few decades, with numerous studies highlighting the paradox where countries rich in natural resources experience slower economic growth. This paper revisits this critical issue by examining the relationship between natural resource rents and economic growth, specifically in non-OECD countries. Given that many of these nations are both resource-rich and characterized by relatively low economic growth, this study employs a spatial Durbin model to provide a nuanced understanding of the impact of resource rents on economic performance. Our findings reinforce the notion of the “Resource Curse," revealing that, in most cases, resource rents exert a detrimental effect on economic growth, thereby exacerbating the economic challenges faced by these countries. In addition, the results reveal that when the “Resource Curse" emerges, not only the home country but also neighboring countries are likely to be harmed. The results underscore the importance of effective resource management and policy interventions to mitigate the adverse effects of resource dependence on long-term economic development.

Keywords: Economic Growth; Resources Rent; Resource Curse; Spatial Durbin model (search for similar items in EconPapers)
JEL-codes: C21 O13 O47 P28 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s00181-025-02775-4

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