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Resource Dependence, Knowledge Creation, And Growth: Revisiting The Natural Resource Curse

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  • Heinz Welsch

    () (Department of Economics, University of Oldenberg)

Abstract

Several explanations have been put forward for the phenomenon - referred to as ¡®curse of natural resources¡¯ - that resource-rich countries tend to display low rates of economic growth. This paper studies an R&D-related explanation, using an endogenous growth model with natural resources and R&D-based technological change. For suitable values of preference parameters, the model predicts that knowledge creation as well as capital formation are inversely related to natural-resource intensity, thus providing an explanation for the ¡®curse¡¯. Estimation results on cross-sectional data for 77 countries (1965-1998) are consistent with these predictions. Basic results of the paper remain valid when institutional aspects (corruption, democracy) are included.

Suggested Citation

  • Heinz Welsch, 2008. "Resource Dependence, Knowledge Creation, And Growth: Revisiting The Natural Resource Curse," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 33(1), pages 45-70, June.
  • Handle: RePEc:jed:journl:v:33:y:2008:i:1:p:45-70
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    Cited by:

    1. Khalid R. Alkhater, 2012. "The Rentier Predatory State Hypothesis: An Empirical Explanation Of The Resource Curse," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(4), pages 29-60, December.

    More about this item

    Keywords

    Endogenous Technological Change; Economic Growth; Natural Resource Curse; Natural Resources;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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