The connection between oil and economic growth revisited

Nuno Torres, Oscar Afonso and Isabel Soares ()
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Isabel Soares: CEF.UP, Faculdade de Economia, Universidade do Porto

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: This study shows that the cross-section “curse” result found with oil abundance indicators for producing countries disappears in a panel estimation considering the most important growth factors. This happens even excluding institutional quality, which is hindered by oil and ores abundance in several cross-section studies, causing the resource curse. In our estimations, neither of the oil indicators shows a significant impact on growth, but when we consider rig productivity there is a positive effect by capital efficiency in: (i) countries with medium and low income per head from East Asia & Pacific and Latin America & the Caribbean, all technological followers; (ii) countries with high income inequality. These results can reflect the broader scope for factor efficiency increases in less developed countries arising from the oil industry, which is described by a highly globalised know-how.

Keywords: Energy; Economic growth; Institutions; Natural resource curse; Panel data (search for similar items in EconPapers)
JEL-codes: C23 O13 O47 O50 Q0 Q40 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010-05
New Economics Papers: this item is included in nep-ene and nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:por:fepwps:377

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