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Oil discoveries and innovation

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  • Mhuru, Raviro Mercy
  • Daglish, Toby
  • Geng, Heng

Abstract

This paper explores the effects of giant oil discoveries on innovation for a sample of 179 countries for the period 1975–2005. Evidence indicates that innovation activity slows down after oil discovery. Using a difference-in-differences design, we show that, on average, patent citations decline by 2.4% per year, and the number of actual patents slows down by approximately 2.5% per year. These results are consistent with the notion of the natural resource curse, a phenomenon where resource-rich economies have inferior growth performance relative to resource-poor economies. Cross-sectional analyses indicate that changes in innovation activities are greater in common law countries. We show that governance quality is a possible channel through which a decline in innovative activity occurs after a resource windfall.

Suggested Citation

  • Mhuru, Raviro Mercy & Daglish, Toby & Geng, Heng, 2022. "Oil discoveries and innovation," Energy Economics, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:eneeco:v:110:y:2022:i:c:s0140988322001694
    DOI: 10.1016/j.eneco.2022.105997
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    References listed on IDEAS

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    Cited by:

    1. Yao, Xin & Li, Xiyan, 2023. "Dark side of resource dependence: Inadequate entrepreneurship," Resources Policy, Elsevier, vol. 85(PA).
    2. Tadadjeu, Sosson & Njangang, Henri & Woldemichael, Andinet, 2023. "Are resource-rich countries less responsive to global warming? Oil wealth and climate change policy," Energy Policy, Elsevier, vol. 182(C).

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    More about this item

    Keywords

    O31 Innovation and Invention: Processes and Incentives; O34 Intellectual Property and Intellectual Capital; Q33 Resource Booms; O57 Comparative Studies of Countries; Q32 Exhaustible Resources and Economic Development; O43 Institutions and Growth;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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