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Natural resource curse: a non linear approach in a panel of oil exporting countries

Majda Seghir () and Olivier Damette

MPRA Paper from University Library of Munich, Germany

Abstract: This paper explores the idea of regime switching as a new methodological approach to bring new insights into the natural resource curse hypothesis in the case of oil exporting countries. The basic idea is that when a threshold of oil dependence is passed, the relationship between economic growth and its determinants could move smoothly from a regime to another. Relying upon the estimation of a PSTR model, our findings offer strong evidence that oil revenues non-linearly impacts economic growth and that resource curse only exists under the condition of high oil dependence. More precisely, below the level of 51% of oil dependence, oil revenues have a positive impact on economic growth, whereas above this level, it have serious drawbacks on economic growth through inefficiencies into the quality and the quantity of government expenditures.

Keywords: Natural resource curse; Panel Smooth Transition Regression; Oil exporting countries (search for similar items in EconPapers)
JEL-codes: O11 O43 Q32 Q43 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-ene and nep-int
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