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Natural Resource Rents, Manufacturing Trade, and Manufacturing Growth: Evidence from Linear and Nonlinear Regressions for ECOWAS Countries

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  • Essotanam Mamba

    (University of Kara
    Laboratoire de Recherche en Sciences Economiques et de Gestion (La.RSEG))

Abstract

This study examines the effects of manufacturing trade and natural resource rents (NRRs) on manufacturing growth in the Economic Community of West African States (ECOWAS) from 1996 to 2020. While industrialization plays an important role in the process of economic growth and poverty reduction, descriptive evidence shows a very low level of manufacturing growth in ECOWAS. The instrumental variables approach with fixed effects is applied to address the endogeneity, autocorrelation, heteroscedasticity and heterogeneity issues. We find a positive (negative) effect of manufacturing trade, manufacturing exports and intra-ECOWAS trade (NRRs) on manufacturing growth while manufacturing imports and total trade are insignificant. However, additional findings show that their effects (manufacturing trade, NRRs) vary from one country to another. Furthermore, we reveal the presence of the Laffer natural resource Curve (inverted U). Finally, the effect of manufacturing trade on manufacturing growth is mediated via NRRs. ECOWAS policymakers must rely on both manufacturing trade and intra-trade in the ECOWAS region to boost manufacturing growth. Also, better management of natural resource rents associated with good trade policies is needed to stimulate manufacturing growth.

Suggested Citation

  • Essotanam Mamba, 2025. "Natural Resource Rents, Manufacturing Trade, and Manufacturing Growth: Evidence from Linear and Nonlinear Regressions for ECOWAS Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 67(1), pages 150-185, March.
    • Handle: RePEc:pal:compes:v:67:y:2025:i:1:d:10.1057_s41294-024-00234-0
    DOI: 10.1057/s41294-024-00234-0
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    More about this item

    Keywords

    Manufacturing trade; Natural resource rents; Manufacturing growth; Instrumental variables approach; Panel data; Interaction and quadratic models;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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