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Revisiting the Natural Resource ‘Curse’ in the Context of Trade in Value Added: Enclave or High-development Backward Linkages?

Author

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  • Filippo Bontadini

    (OFCE-SciencesPo, Nice/SPRU, University of Sussex, UK)

  • Maria Savona

    (SPRU, University of Sussex, UK)

Abstract

This paper puts forward and empirically tests the conjecture that specialisation in Natural Resource Industries (NRI) might not necessarily be a ‘curse’ for (developing) countries, if it provides opportunities for export diversification in backward linked sectors à la Hirschman. We first revisit the evolution of the debate around the NRI ‘curse’, including those from scholars sceptical of diversification based on beneficiation from NRI. We then empirically test whether NRI might represent a sufficient “domestic representative demand” à la Linder for backward linked sectors such as Knowledge Intensive Business Services (KIBS) or high tech manufacturing that might provide new opportunities for export diversification led by virtuous pathways of domestic structural change. We find empirical support for this conjecture and discuss some implications that revisit the NRI curse debate.

Suggested Citation

  • Filippo Bontadini & Maria Savona, 2019. "Revisiting the Natural Resource ‘Curse’ in the Context of Trade in Value Added: Enclave or High-development Backward Linkages?," SPRU Working Paper Series 2019-15, SPRU - Science Policy Research Unit, University of Sussex Business School.
    • Handle: RePEc:sru:ssewps:2019-15
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    More about this item

    Keywords

    Natural Resource Curse; Backward Linkages; Trade; Value Added; Input-Output;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative

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