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The Shifting Natural Wealth of Nations: The Role of Market Orientation

Author

Listed:
  • Rick van der Ploeg
  • Rabah Arezkir
  • Frederik Toscani

Abstract

This paper explores the effect of market orientation on (known) natural wealth using a novel dataset of world-wide major hydrocarbon and mineral discoveries. Consistent with the predictions of a two-region model, our empirical estimates based on a large panel of countries show that increased market orientation causes a significant increase in discoveries. In a thought experiment whereby economies in Latin America and sub-Saharan Africa remained closed, they would have only achieved one quarter of the actual increase in discoveries they have experienced since the early 1990s. Our results call into question the commonly held view that resource endowment is exogenous.

Suggested Citation

  • Rick van der Ploeg & Rabah Arezkir & Frederik Toscani, 2017. "The Shifting Natural Wealth of Nations: The Role of Market Orientation," OxCarre Working Papers 180, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  • Handle: RePEc:oxf:oxcrwp:180
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    File URL: https://www.oxcarre.ox.ac.uk/images/stories/papers/ResearchPapers/oxcarrerp2016180.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    natural resources; discoveries; market orientation; liberalization; institutions; endogenous reserves;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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