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Oil Abundance and Economic Growth--A Panel Data Analysis

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  • Nuno Torres, Oscar Afonso, and Isabel Soares

Abstract

Using panel estimation, this paper shows that higher oil abundance does not hinder crude producers' growth. This sample controls for specificities of oil economies, but the usual cross-section `curse' result is found—it disappears allowing for unobserved effects. The chosen model controls for a potential (but unconfirmed) oil curse working through institutions, and for other growth factors such as education, which is considered by deriving real wage growth as the dependent variable. We measure the oil growth-effects through labor and capital efficiency, and as a factor of production. They are all insignificant for oil production, but rig productivity benefits growth through capital efficiency. However, oil concentration only fosters growth (by reducing the capital necessary to oil exploration) significantly if there is fiscal responsibility, and in developing countries, where institutions are weaker and there is a broader scope for factor-efficiency and technological improvements arising from the oil sector.

Suggested Citation

  • Nuno Torres, Oscar Afonso, and Isabel Soares, 2012. "Oil Abundance and Economic Growth--A Panel Data Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
  • Handle: RePEc:aen:journl:33-2-06
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    References listed on IDEAS

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    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    2. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
    3. Soytas, Ugur & Sari, Ramazan, 2003. "Energy consumption and GDP: causality relationship in G-7 countries and emerging markets," Energy Economics, Elsevier, vol. 25(1), pages 33-37, January.
    4. Grace, John D., 2005. "Russian Oil Supply: Performance and Prospects," OUP Catalogue, Oxford University Press, number 9780197300305.
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    Cited by:

    1. Itchoko Motande Mondjeli Mwa Ndjokou & Pierre Christian Tsopmo, 2017. "The effects on economic growth of natural resources in Sub-Saharan Africa: Does the quality of institutions matters?," Economics Bulletin, AccessEcon, vol. 37(1), pages 248-263.

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    JEL classification:

    • F0 - International Economics - - General

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