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Threshold regressions for the resource curse

Published online by Cambridge University Press:  10 August 2020

Nicolas Clootens Open the ORCID record for Nicolas Clootens [Opens in a new window]  and
Djamel Kirat
Nicolas Clootens*
Affiliation:
AMSE, Aix-Marseille University, CNRS, EHESS, Centrale Marseille, Marseille, France LEO, Université Orléans, CNRS, France
Djamel Kirat
Affiliation:
LEO, Université Orléans, CNRS, France
*
*Corresponding author. nicolas.clootens@centrale-marseille.fr
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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.

Keywords

growthnatural resourcesresource cursethreshold regressions

JEL classification

O13: Agriculture • Natural Resources • Energy • Environment • Other Primary Products Q33: Resource Booms O11: Macroeconomic Analyses of Economic Development
Type
Research Article
Information
Environment and Development Economics , Volume 25 , Special Issue 6: The Environment, Resources and Pollution – New Challenges for Economic Development , December 2020 , pp. 583 - 610
Copyright
Copyright © The Author(s), 2020. Published by Cambridge University Press

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