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Africa Is Rich, Africans Are Poor! A Blessing or Curse: An Application of Cointegration Techniques

Sofien Tiba and Mohamed Frikha ()
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Mohamed Frikha: University of Sfax

Journal of the Knowledge Economy, 2020, vol. 11, issue 1, No 8, 114-139

Abstract: Abstract The purpose of the current survey is to examine the presence of the resource curse mechanism for a panel of 22 African countries during the time span 1990–2013. For this purpose, our survey uses the Pedroni panel cointegration test to detect the existence of a long-run relationship, fully modified ordinary least square, dynamic ordinary least square, and the vector error correction model techniques to check the causality direction. Our empirical evidence reveals the fact of a negative long-run relationship between resource intensity index and the economic performance which means that the existence of curse mechanism implies that the resource abundance exerts a negative influence on the economic performance. Hence, this curse is defined by the economic theory as the “resource curse hypothesis” (RCH). Thus, the RCH is well validated in our framework. We suggested that adequate and sufficient investments affecting the human aspect were devoted; hence, generating coherent externalities related to the productivity and ecological aspects and thus sustainability. Good quality of institutions depicts as one crucial efficient condition for a better environment and wealth, combining with human development investments.

Keywords: Resource curse hypothesis; Africa; Pedroni panel cointegration; VECM (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s13132-018-0538-9

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Handle: RePEc:spr:jknowl:v:11:y:2020:i:1:d:10.1007_s13132-018-0538-9