Empirical Evidence on the Resource Curse Hypothesis in Oil Abundant Economy
AbstractThis present study investigates the relationship between natural resource abundance and economic growth in Venezuelan economy. We have applied the ARDL bounds testing approach to cointegration developed by Pesaran et al. (2001) to examine long run relationship between the variables. The VECM Granger causality is applied to test the direction of causality between the variables. The present study covers the period of 1971-2011. Our empirical evidence indicated that variables are found to be cointegrated. The results confirm that natural resource abundance impedes economic growth. Financial development, capital stock and trade openness enhance economic growth. The feedback hypothesis is also found between natural resource abundance and economic growth.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 50150.
Date of creation: 11 Sep 2013
Date of revision: 20 Sep 2013
natural resource abundance; economic growth; cointegration;
Find related papers by JEL classification:
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-02 (All new papers)
- NEP-ARA-2013-10-02 (MENA - Middle East & North Africa)
- NEP-CWA-2013-10-02 (Central & Western Asia)
- NEP-ENE-2013-10-02 (Energy Economics)
- NEP-FDG-2013-10-02 (Financial Development & Growth)
- NEP-RES-2013-10-02 (Resource Economics)
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