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

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  • Seghir, Majda
  • Damette, Olivier

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.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 51604.

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Date of creation: 2013
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Handle: RePEc:pra:mprapa:51604

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Keywords: Natural resource curse; Panel Smooth Transition Regression; Oil exporting countries;

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