Disentangling the heterogeneous effect of natural resources on economic growth

Daniel Aparicio-Pérez () and Jordi Ripollés
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Daniel Aparicio-Pérez: Department of Finance and Accounting, Universitat Jaume I, Castellón, Spain

No 2024/02, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: This paper aims to identify the heterogeneity in the resource-growth nexus and explore the relative importance of the potential factors that may drive it. By exploiting a panel dataset of 97 countries from 1990 to 2019, we employ the Group Fixed Effect estimator of Bonhomme and Manresa (2015) to endogenously identify groups of countries with different time-varying patterns of economic growth that, in addition, present a heterogeneous economic response to changes in natural resource wealth. Subsequently, we employ an ordered probit to characterize the identified heterogeneity, assessing the relevance of multiple institutional factors and other transmission channels. Our findings indicate that the effect of natural resources on economic growth varies significantly among groups of countries, particularly in relation to the quality of economic and political institutions, social capital, export diversification, and financial development.

Keywords: Economic growth; Grouped fixed effects; Heterogeneity; Institutions; Natural resources; Ordered probit. (search for similar items in EconPapers)
JEL-codes: C23 O13 O43 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2024
New Economics Papers: this item is included in nep-dev, nep-env, nep-eur, nep-fdg, nep-gro and nep-inv
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Persistent link: https://EconPapers.repec.org/RePEc:jau:wpaper:2024/02

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