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The shifting natural wealth of nations : the role of market orientation

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  • Arezki,Rabah
  • van der Ploeg,Frederick
  • Toscani,Frederik

Abstract

This paper explores the effect of market orientation on (known) natural resource wealth using a novel dataset of world-wide major hydrocarbon and mineral discoveries. Consistent with the predictions of a two-region model, the empirical estimates based on a large panel of countries show that increased market orientation causes a significant increase in discoveries of natural resources. In a thought experiment whereby economies in Latin America and sub-Saharan Africa remained closed, they would have only achieved one quarter of the actual increase in discoveries they have experienced since the early 1990s. The results call into question the commonly held view that natural resource endowments are exogenous.

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  • Arezki,Rabah & van der Ploeg,Frederick & Toscani,Frederik, 2018. "The shifting natural wealth of nations : the role of market orientation," Policy Research Working Paper Series 8520, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8520
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    6. Boucekkine, Raouf & Prieur, Fabien & Vasilakis, Chrysovalantis & Zou, Benteng, 2021. "Stochastic petropolitics: The dynamics of institutions in resource-dependent economies," European Economic Review, Elsevier, vol. 131(C).
    7. Graham A. Davis, 2020. "Large-sample evidence of income inequality in resource-rich nations," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(1), pages 193-216, July.
    8. Adrien Desroziers & Yassine Kirat & Arsham Reisinezhad, 2023. "Carbon curse: As you extract, so you will burn," Working Papers 2023.09, FAERE - French Association of Environmental and Resource Economists.
    9. van der Ploeg, Frederick, 2020. "Race to burn the last ton of carbon and the risk of stranded assets," European Journal of Political Economy, Elsevier, vol. 64(C).
    10. Cassidy, Traviss, 2017. "How Forward-Looking Are Local Governments? Evidence from Indonesia," MPRA Paper 97776, University Library of Munich, Germany, revised 01 Jun 2019.
    11. Brunnschweiler, Christa N. & Poelhekke, Steven, 2021. "Pushing one’s luck: Petroleum ownership and discoveries," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    12. Mihalyi,David & Scurfield,Thomas, 2020. "How Did Africa's Prospective Petroleum Producers Fall Victim to the Presource Curse ?," Policy Research Working Paper Series 9384, The World Bank.
    13. Traviss Cassidy, 2019. "The Long-Run Effects of Oil Wealth on Development: Evidence from Petroleum Geology," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2745-2778.
    14. Mihalyi, David, 2020. "The Long Road to First Oil," MPRA Paper 103725, University Library of Munich, Germany.
    15. Rick Van der Ploeg & Fidel Perez-Sebastian & Ohad Raveh, 2019. "Oil Discoveries and Protectionism," Economics Series Working Papers 895, University of Oxford, Department of Economics.
    16. Cust, James & Harding, Torfinn & Krings, Hanna & Rivera-Ballesteros, Alexis, 2023. "Public governance versus corporate governance: Evidence from oil drilling in forests," Journal of Development Economics, Elsevier, vol. 163(C).
    17. Zuo, Na & Zhong, Hua, 2019. "The Effect of Resource Wealth on Regional Economic Development in China," 2019 Annual Meeting, July 21-23, Atlanta, Georgia 291114, Agricultural and Applied Economics Association.
    18. Chuku, Chuku & Lang, Lin & Lim, King Yoong, 2023. "Public debt, Chinese loans and optimal exploration–extraction in Africa," Energy Economics, Elsevier, vol. 118(C).
    19. Perez-Sebastian, Fidel & Raveh, Ohad & van der Ploeg, Frederick, 2021. "Oil discoveries and protectionism: Role of news effects," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    20. van der Ploeg, Frederick & Rezai, Armon, 2020. "The risk of policy tipping and stranded carbon assets," Journal of Environmental Economics and Management, Elsevier, vol. 100(C).
    21. Rick Van der Ploeg & Armon Rezai, 2018. "Climate Policy and Stranded Carbon Assets: A Financial Perspective," OxCarre Working Papers 206, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    22. Jonas Hveding Hamang, 2022. "Local economic development and oil discoveries," Working Papers No 03/2022, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
    23. Cassidy, Traviss, 2017. "Revenue Persistence and Public Service Delivery," MPRA Paper 114464, University Library of Munich, Germany, revised 06 Sep 2022.

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    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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