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Oil windfalls and export diversification in oil-producing countries: Evidence from oil booms

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  • Djimeu, Eric W.
  • Omgba, Luc Désiré

Abstract

This paper examines the factors behind export diversification in oil countries. Specifically, we investigate the impact of oil booms on export diversification through an empirical framework. The paper finds that economy's export structure before the oil boom determines whether oil windfalls might affect the diversification process. Thus, an oil boom negatively affects export diversification only if countries initially exhibit low levels of diversification. In countries with a high level of diversification before the boom, an oil boom has no impact on diversification. These results are based on a large sample of 134 countries, and are robust to various sensitivity analyses. They are corroborated with data from the manufacturing sector which show that oil booms only reduce diversification in countries with a small manufacturing sector prior to the boom.

Suggested Citation

  • Djimeu, Eric W. & Omgba, Luc Désiré, 2019. "Oil windfalls and export diversification in oil-producing countries: Evidence from oil booms," Energy Economics, Elsevier, vol. 78(C), pages 494-507.
  • Handle: RePEc:eee:eneeco:v:78:y:2019:i:c:p:494-507
    DOI: 10.1016/j.eneco.2018.11.033
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    More about this item

    Keywords

    Export diversification; Oil resources; Panel data;

    JEL classification:

    • F1 - International Economics - - Trade
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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