Resource Curse: New Evidence on the Role of Institutions

Tamat Sarmidi, Siong Hook Law, Yaghoob Jafari

Research output: Contribution to journalArticle

22 Citations (Scopus)

Abstract

This paper attempts to provide a probable answer to a longstanding resource curse puzzle; i.e., why resource-rich nations grow at a slower rate compared with less fortunate ones. Using an innovative threshold estimation technique, the empirical results reveal that there is a threshold effect in the natural resources-economic growth relationship. We find that the impact of natural resources is meaningful to economic growth only after a certain threshold point of institutional quality has been attained. The results also shed light on the fact that the nations that have low institutional quality depend heavily on natural resources while countries with high quality institutions are relatively less dependent on natural resources to generate growth.

Original languageEnglish
Pages (from-to)191-206
Number of pages16
JournalInternational Economic Journal
Volume28
Issue number1
DOIs
Publication statusPublished - Jan 2014

Fingerprint

Natural resources
Resource curse
Economic growth
Institutional quality
Empirical results
Resources
Threshold estimation
Threshold effects
Resource economics

Keywords

  • Economic development
  • institutions
  • natural resource curse

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

Resource Curse : New Evidence on the Role of Institutions. / Sarmidi, Tamat; Hook Law, Siong; Jafari, Yaghoob.

In: International Economic Journal, Vol. 28, No. 1, 01.2014, p. 191-206.

Research output: Contribution to journalArticle

Sarmidi, Tamat ; Hook Law, Siong ; Jafari, Yaghoob. / Resource Curse : New Evidence on the Role of Institutions. In: International Economic Journal. 2014 ; Vol. 28, No. 1. pp. 191-206.
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