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The Role of Natural Resources and Geography for Productivity in Developed Countries

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  • Sakari Lähdemäki

    (Palkansaajien tutkimuslaitos)

  • Eero Lehto
  • Eero Mäkynen

Abstract

This paper considers how natural resources and geography impact labour productivity either directly or through R&D-intensity, education level and product structure. The country set considered includes 42 developed and developing countries. By geo-graphy, we mean population size, internal density and geographical centrality with respect to activity outside a country’s borders. According to our results, of natural resources forest area and gas and oil reserves have mostly a negative total effect on labour productivity. Agricultural area and minerals, instead, support productivity. Of geographical variables internal density raises R&D-intensity and via it productivity. Geographical centrality and population size, instead, negatively impacts productivity.

Suggested Citation

  • Sakari Lähdemäki & Eero Lehto & Eero Mäkynen, 2018. "The Role of Natural Resources and Geography for Productivity in Developed Countries," Working Papers 320, Palkansaajien tutkimuslaitos, Labour Institute for Economic Research.
  • Handle: RePEc:pst:wpaper:320
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    More about this item

    Keywords

    productivity; natural resources; geography; R&D-intensity; education; consumer goods share of manufacturing;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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