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Natural Resource Abundance and Economic Growths

  • Ning Ding
  • Barry C. Field
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    This paper explores whether natural resource abundance leads to slower growth rates. We distinguish between natural resource dependence (RD) and natural resource endowment (RE). We estimate two models, using World Bank data on national capital stocks. In a one-equation model we show that RD has a negative effect on growth rates, apparently confirming the main results of the resource “curse” literature. RE, however, has a positive impact on growth. We then estimate a three-equation recursive model, introducing endogenous human capital and allowing for endogeneity also in resource dependence. Here the effects of natural resources on growth are not significant.

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    Article provided by University of Wisconsin Press in its journal Land Economics.

    Volume (Year): 81 (2005)
    Issue (Month): 4 ()

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    Handle: RePEc:uwp:landec:v:81:y:2005:i:4:p496-502
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    1. Jonathan Isham & Michael Woolcock & Lant Pritchett & Gwen Busby, 2003. "The Varieties of Resource Experience: How Natural Resource Export Structures Affect the Political Economy of Economic Growth," Middlebury College Working Paper Series 0308, Middlebury College, Department of Economics.
    2. Auty, Richard M., 2001. "The political economy of resource-driven growth," European Economic Review, Elsevier, vol. 45(4-6), pages 839-846, May.
    3. Stijns, Jean-Philippe C., 2001. "Natural Resource Abundance and Human Capital Accumulation," Conference Papers 25128, University of California, Berkeley, Department of Agricultural and Resource Economics.
    4. Self, Sharmistha & Grabowski, Richard, 2004. "Does education at all levels cause growth? India, a case study," Economics of Education Review, Elsevier, vol. 23(1), pages 47-55, February.
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