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Economic growth, natural resource rents, and business openness nexus in regions and income levels of Africa: evidence from recent panel estimators

Author

Listed:
  • Jean Pierre Namahoro

    (China University of Geosciences (Wuhan))

  • Wu Qiaosheng

    (China University of Geosciences (Wuhan))

  • Su Hui

    (China University of Geosciences (Wuhan))

Abstract

The effect of a difference in regions and economic levels, coupled with variations in natural resource rents, total import and export, and economic growth, has been ignored in studies that investigated the link between natural resource rents, trade openness, and economic growth across African countries. To overcome these deficiencies, this study aims to examine the impact of total natural resource rents and trade openness in terms of total import and export on economic growth across regions and the economic levels of African countries. Recent econometric models (CS-DL), variance decomposition, and impulse response were employed for the panel of 48 African countries from 1980 to 2018. Findings revealed total natural resource rent has a long-term significant negative effect on economic growth across regions and economic levels. Trade openness in terms of total export has a significant positive effect on growth at the panel of 48 countries, while the effect of both total import and export is mixed across regions and economic levels. A bi-directional causations relationship between natural resource rents, trade openness, and growth in the panel of involved countries, some subpanels. It was noted that trade openness counted higher variations of GDP than resource rents within 10 years. Empirical results of this study awaken up regional and government policymakers to reflect on negative effects and neutral links noticed between variables across economic levels and regions for reasonably sustainable developments across Africa.

Suggested Citation

  • Jean Pierre Namahoro & Wu Qiaosheng & Su Hui, 2023. "Economic growth, natural resource rents, and business openness nexus in regions and income levels of Africa: evidence from recent panel estimators," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 36(4), pages 583-598, December.
    • Handle: RePEc:spr:minecn:v:36:y:2023:i:4:d:10.1007_s13563-022-00362-y
    DOI: 10.1007/s13563-022-00362-y
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