The Resource Curse Hypothesis: Dynamic Heterogeneous Approach

Dong-Hyeon Kim, Shu Chin Lin

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

Natural resources influence economic performance through many different mechanisms, both beneficial and harmful. Some of these mechanisms tend to set in fast while others are rather slow. This suggests that pooling the long- and short-run effect as typical in the resource empirical literature may lead to incorrect inferences. This article provides an evaluation of the income contribution of natural resources using a panel cointegration approach that allows for short-run dynamic heterogeneity while imposing the restriction of long-run homogeneity. It finds, in a sample of developing countries over the period 1990–2012, that natural resources are a curse in the long run. The evidence is robust to alternative dynamic specifications, different measures and types of natural resource wealth, and controlling for regional effects.

Original languageEnglish
Pages (from-to)1-20
Number of pages20
JournalEmerging Markets Finance and Trade
DOIs
Publication statusAccepted/In press - 2018 Jun 30

ASJC Scopus subject areas

  • Finance
  • Economics, Econometrics and Finance(all)

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