Threshold regressions for the resource curse

Abstract

This paper analyzes the behavior of cross-country growth rates with respect to resource abundance and dependence. We reject the linear model that is commonly used in growth regressions in favor of a multiple-regime alternative. Using a formal sample-splitting method, we find that countries exhibit different behaviors with respect to natural resources depending on their initial level of development. In high-income countries, natural resources play only a minor role in explaining the differences in national growth rates. On the contrary, in low-income countries, abundance seems to be a blessing but dependence restricts growth.

India’s Total Natural Resource Rents (NRR) and GDP: An Augmented Autoregressive Distributed Lag (ARDL) Bound Test

“…This highlights the implications of our study findings, which suggest that Indian policymakers should consider this when developing natural resource development policies. Moreover, Clootens and Kirat (2017) discovered that the effect of natural resource rent on economic growth is dependent on the economic performance of different groups, demonstrating the resource curse in low-income countries.…”

“…According to a review of the literature, natural resource rent has had a significant impact on major economic indicators (Dramani et al 2022;Ben-Salha et al 2021;Frankel 2010;Ampofo et al 2020). Many studies of the variables, i.e., natural resources and economic indicators (Bhatnagar and Pathak 2021;Özen and Taneja 2022), are conducted around the world (Clootens and Kirat 2017;Hegwood and Papell 2007;Ibrahim 2017;Fleissig and Strauss 1999;Sachs and Warner 1995;Stijns 2005), but significantly less research has been conducted in India (Ampofo et al 2020). This paper attempts to fill a gap in the assessment of the trend analysis of natural resource rent and the measurement of its impact on India's economic growth.…”

Introduction: special issue on the environment, resources and pollution – new challenges for economic development

“…The papers include three empirical contributions (Hou et al ., 2020; Martinez and Philips, 2020; Zhang, 2020) and three methodological approaches, the first of which develops innovative theoretical models (Ba et al ., 2020), the second of which illustrates trade-offs between demographic features and environmental constraints (Cassin, 2020) and the last one which improves a widely-used regression technique in economic development and environmental economics (Clootens and Kirat, 2020). The studied geographical areas include a specific application for Caribbean economies (Cassin, 2020) and one for China (Zhang, 2020), and three which cover large country-samples with up to 83 countries (Clootens and Kirat, 2020; Hou et al ., 2020; Martinez and Philips, 2020). This holistic approach with various methodologies facilitates the exchange of ideas between researchers from various sub-disciplines of economics, often in an interdisciplinary approach, and is suitable to improve our understanding of environmental constraints and their effects on economic development.…”

Institutions, growth and comparative economic development: geographical and methodological perspectives

“…or inhibitors of the resources blessing, or investigate the economic impact of natural resources under heterogeneous growth paths (e.g., Cavalcanti et al, 2011;Clootens et al, 2017;Lee and He, 2022;Haseeb et al, 2021).…”