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The connection between oil and economic growth revisited

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  • Nuno Torres

    ()
    (Faculdade de Economia, Universidade do Porto, Portugal)

  • Óscar Afonso

    ()
    (CEF.UP, OBEGEF and Faculdade de Economia, Universidade do Porto, Portugal)

  • Isabel Soares

    ()
    (CEF.UP, Faculdade de Economia, Universidade 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.

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Bibliographic Info

Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 377.

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Length: 33 pages
Date of creation: May 2010
Date of revision:
Handle: RePEc:por:fepwps:377

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Keywords: Energy; Economic growth; Institutions; Natural resource curse; Panel data;

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