The effect of oil rents on economic growth: Does digital adoption matter?

Pedram Sharafi and Mohammad Reza Farzanegan ()
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Pedram Sharafi: Philipps-Universität Marburg, Center for Near and Middle Eastern Studies (CNMS), School of Business and Economics
Mohammad Reza Farzanegan: Philipps-Universität Marburg, Center for Near and Middle Eastern Studies (CNMS), School of Business and Economics; CESifo; Economic Research Forum (ERF)

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: This study investigates the relationship between oil rents and economic growth, identifying digital adoption as a critical moderating factor. Utilizing a cross-sectional sample of 101 countries, we analyze the impact of oil rents (2014–2016) on subsequent GDP per capita growth (2016–2023). Our regression analysis provides empirical evidence of a "digitalization-resource nexus": while a significant "oil curse" persists in countries with low digital adoption, this negative association attenuates as digital integration increases. Notably, our findings suggest a turning point (DAI ≈ 0.72) beyond which oil wealth may transition from a growth constraint to a catalyst. These results remain robust after controlling for institutional quality, human capital, and trade openness. The study concludes that investments in digital infrastructure and skills are not merely technological upgrades but essential structural reforms for resource-dependent economies seeking to bypass the resource curse.

Keywords: Economic growth; digitalization; digital adoption; oil rents; resource curse (search for similar items in EconPapers)
Pages: 20 pages
Date: 2026
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