Resource curse versus resource blessing: New evidence from resource capital data

This study aims to investigate the association between natural capital and economic development using panel data comprising a large number of countries across the world for the period 1995-2018. The study accounts for several key drivers of economic development, such as the produced capital, human capital, trade and institu-tional quality indicators. Our findings demonstrate that the effect flowing from natural capital to economic performance is sizable and positive. The institutional indicators such as the control of corruption, rule of law and government effectiveness play an important role in driving economic growth positively. Overall, we reject the resource curse hypothesis and support the resource blessing hypothesis. The evidence also shows that the combined effect of institutions and resources is not a crucial factor in determining growth. These results are fairly consistent for both developing and developed economies. The study offers important policy implications and adds a new dimension to the empirical literature on the nexus between resource abundance and economic growth by using wealth and capital data.

Automated summary

This study investigates the association between natural capital and economic development by analyzing panel data from various countries. The findings suggest that natural capital has a significant and positive effect on economic performance. Additionally, institutional quality indicators are also important drivers of economic growth. The study challenges the resource curse hypothesis and supports the resource blessing hypothesis. The results hold true for both developing and developed economies. This research contributes important policy implications and expands the empirical literature on the relationship between resource abundance and economic growth by incorporating wealth and capital data.