This thesis looks into the relationship between natural resources and non-resource economic activity in resource-rich countries. This relationship has been investigated through the literature of the “resource curse” which was first noted by Sachs and Warner (1995) who show a significant negative relation between natural resource dependence and income growth. Despite the developing literature in that area, empirical tests suffered from endogeneity. In this thesis, I try to add more resilient identification strategies in order to assess the effect of resource abundance on the macro economy using exogenous variations in 136 countries from 1962-2012. The first essay of this thesis examines the correlation between natural resource rents and economic diversification. The main question I ask in this essay is can resource-rich countries diversify their economies? To address this issue, the essay empirically tests diversification in exports, in employment and in value added and finds a significant negative impact. In the second empirical essay of this thesis, I focus on giant oil and gas discoveries as the main external variation and test the role of institutional quality in diversification when a country becomes resource abundant. Results show that all countries with varied institutional quality go through export concentration after giant oil discoveries. The third empirical essay looks more thoroughly into the manufacturing sector. I estimate the causal effect of two commodity shocks suggested by the Dutch Disease hypothesis on the tradable manufacturing industries: giant oil discoveries as a resource discovery shock, and oil price boom and bust as a commodity price shock. The results suggest a negative impact on the tradable industries growth in manufacturing value added and wages. These results add more credible empirical evidence to the Dutch Disease literature.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:725229 |
| Date | January 2017 |
| Creators | Alsharif, Nouf Nasser |
| Publisher | University of Sussex |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://sro.sussex.ac.uk/id/eprint/70478/ |
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