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Threshold Regressions for the Resource Curse

Nicolas Clootens () and Djamel Kirat

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Abstract: This paper analyzes the behavior of cross-country growth rates with respect to resource abundance and dependence. We reject the linear model that is commonly-used in growth regressions in favor of a multiple-regime alternative. Using a formal sample-splitting method, we find that countries exhibit different behaviors with respect to natural resources depending on their initial level of development. In high-income countries, natural resources play only a minor role in explaining the differences in national growth rates. On the contrary, in low-income countries abundance seems to be a blessing but dependence restricts growth.

Keywords: threshold regressions; non-renewable resources; growth; resource curse (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-gro
Date: 2018-11
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01944214
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Working Paper: Threshold Regressions for the Resource Curse (2018) Downloads
Working Paper: Threshold Regressions for the Resource Curse (2018) Downloads
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