THE IMPORTANCE OF NATURAL RESOURCES FOR ECONOMIC GROWTH: INTERNATIONAL EVIDENCE

This study empirically investigates the importance of natural resources for economic growth. Natural resources can be thought of as both the blessing and the curse for growth, and theoretical arguments support both of these cases. Empirical literature is also ambiguous regarding the impact of natural resources on economic growth. In this paper, we allow for a broad set of growth determinants. In addition to the typical growth determinants like human and physical capital, a number of additional variables is tested including trade openness, government consumption, institutions, and, in particular, natural resources variables. Our investigation is conducted in a broad sample of countries amounting to as many as 138, with the data ranging from 1960 onwards. The panel data estimation techniques are applied using the 5- and 10-year averages. With the broad coverage of countries and use of modern econometric techniques, this study provides novel international evidence supporting the "curse" view of natural resources.