The nonlinear effect of natural resource abundance on economic growth with emphasis on non-resource export and Dutch disease (Case study of selected OPEC member countries)
Niloufar Khatami 1 , saeed Daei-Karimzadeh 2
1 - Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran
2 - Associate Professor of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran
Keywords: Natural resources, Non-resource exports, Curse of resources, Dutch disease, Economic Growth,
Abstract :
Because the government in countries with abundant natural resources depends on one or more limited resources, if there are trade barriers, national income decreases and economic growth slows down. The research question is whether the effect of non-resource exports on economic growth is non-linear and whether the real effective exchange rate, which has a direct role on the flow of exports, can lead to the Dutch disease phenomenon or not? The aim of this study is to investigate the nonlinear effect of natural resource abundance on economic growth by focusing on non-resource export and the real effective exchange rate variables for the 16 selected OPEC member countries during the period between 2000 and 2021. In order to analyze the data, GMM method has been used. Findings showed that the abundance of natural resources has led to a decrease in economic growth, which indicates the occurrence of the resource curse phenomenon in the studied countries. Also, the second power of the natural resources abundance variable has a positive and significant effect, based on which it can be concluded that the natural resources abundance variable has a non-linear effect on economic growth in the studied countries.