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Journal Articles Environment and Development Economics Year : 2020

Threshold regressions for the resource curse

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.

Dates and versions

halshs-02952519 , version 1 (29-09-2020)

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Nicolas Clootens, Djamel Kirat. Threshold regressions for the resource curse. Environment and Development Economics, 2020, 25 (6), pp.583-610. ⟨10.1017/S1355770X20000297⟩. ⟨halshs-02952519⟩
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