The causative relationship between natural resource rent and economic growth: evidence from Ghana’s crude oil resource extraction

Purpose While the relationship between natural resource rent and economic growth is well documented in the literature, not much robust analysis has been done to estimate the causative relationship between oil resource rent and economic growth in Ghana. This might be due to the fact that commercial production of crude oil started not long ago in Ghana. This paper aims to examine the causal relationship between oil resource rent and economic growth for the period of 2011 to 2020 in Ghana. Design/methodology/approach The study incorporates economic growth as a function of oil resource rent, non-oil revenue, foreign direct investment, capital and interest rate in a Cobb–Douglass production function/model. The study used four different estimation strategies including the autoregressive distributed lags model, Toda–Yamamoto test approach, nonlinear autoregressive distributed lags model and nonlinear Granger causality. Findings The main finding revealed that 1% increase in oil resource rent generates 0.84% increase in economic growth of Ghana in the long run. Contrary, the authors find an insignificant positive effect of oil resource rent on economic growth of Ghana in the short run for the period under study. The result from the Toda–Yamamoto test approach also showed a unidirectional causality running from oil resource rent to economic growth of Ghana, providing evidence in support of the resource blessing hypothesis in Ghana. The results are robust to two different alternative estimation strategies. Originality/value The causal relationship between crude oil resource rent and economic growth is examined.

NATURAL RESOURCE RENTS AND INTERNAL CONFLICT: THE ROLE OF INSTITUTIONAL QUALITY

The study explores the impact of natural resource rents on internal conflicts and examines how the aforementioned relationship is influenced by institutional quality. The study is based on a panel dataset of 70 countries for the period 1991–2018. The empirical evidence shows that natural resource rent leads to an increase in internal conflict in both developed and developing countries. However, the impact of natural resource rent on internal conflict is negative in the presence of better quality of government institutions for the global sample, developed and developing countries. Hence, natural resource rent leads to a reduction in internal conflict when it is supported by better institutional quality in terms of high bureaucratic quality, rule of law and low corruption in government institutions. Overall, the study finds that natural resource rent leads to an increase in internal conflict, however, this relationship is mitigated by better institutional quality.

Development options for the world monetary system

Выявлены факторы влияния валютной политики на валютный рынок и реальный сектор экономики Российской Федерации. Составлена модель для анализа факторов, влияющих на уровень заниженности или завышенности валютного курса Российской Федерации по отношению к паритетному валютному курсу. Показано, что уровень заниженности валютного курса отрицательно коррелирует с сальдо платежного баланса и ростом ВВП, при этом положительно коррелирует с уровнем инфляции, уровнем природной ренты в экономике и уровнем коррупции в стране. Предложены организационные мероприятия для повышения эффективности валютного контроля в России. The factors of influence of monetary policy on the foreign exchange market and the real sector of the economy of the Russian Federation are revealed. A model has been compiled to analyze the factors that influence the level of undervaluation or overvaluation of the Russian Federation exchange rate in relation to the parity exchange rate. It is shown that the level of undervaluation of the exchange rate negatively correlates with the balance of payments and GDP growth, while positively correlating with the level of inflation, the level of natural resource rent in the economy and the level of corruption in the country. Organizational measures are proposed to improve the efficiency of currency control in Russia.

Natural Resources, Institutional Quality and Financial Development in GCC Member Countries: Visiting ‘Resource Curse Hypothesis’ by DCCE Estimation

The main purpose of the study is to check whether natural resource rent affects the financial development or supporting the resource curse hypothesis by employing a recently developed estimation technique by Chudik and Pesaran (2015) from 1985 to 2017 in GCC member countries. The novelty of this methodology is to consider structural breaks and the heterogeneity issues that are common in panel data. The results of DCCE estimates are in support of the resource hypothesis that natural resource rent hurt financial development. Additionally, this study takes moderation of institutional quality to check the threshold point or turning point where the natural resource rent effect becomes positive. Our results of interaction term postulate that a higher level of institutional quality mitigates the adverse effect of natural resource rent on financial development. The study results recommend the policy of natural resource rent in the presence of high institutional quality should continue because it improves the financial development in GCC member countries.

Natural Resources, Institutional Quality and Financial Development in GCC Member Countries: Visiting ‘Resource Curse Hypothesis’ by DCCE Estimation

The main purpose of the study is to check whether natural resource rent affects the financial development or supporting resource curse hypothesis by employing a recently developed estimation technique by Chudik and Pesaran (2015) over 1985 to 2017 in GCC member countries. The novelty of this methodology is to consider structural breaks and the heterogeneity issues that are common in panel data. The results of DCCE estimates are in support of resource hypothesis that natural resource rent hurt financial development. Additionally, this study takes moderation of institutional quality to check the threshold point or turning point where natural resource rent effect becomes positive. Our results of interaction term postulate that a higher level of institutional quality mitigates the adverse effect of natural resource rent on financial development. The study results recommend the policy of natural resource rent in the presence of high institutional quality should continue because it improves the financial development in GCC member countries.

Financial Development and Natural Resources Dynamics in Saudi Arabia: Visiting ‘Resource Curse Hypothesis’ by NARDL and Wavelet-Based Quantile-on-Quantile Approach

This study analyses the impact of natural resource rent on financial development to test the resource curse hypothesis in Saudi Arabia on quarterly data span from 1985Q1 to 2017Q4. We employ two novel methodologies at same time such as nonlinear autoregressive model (NARDL) and Wavelet-based quantile-on-quantile estimation to check the asymmetric behaviour of natural resource rent on financial development. The findings of NARDL confirm the nonlinear behaviour of natural resource rent with financial development. The results also show real GDP, gross capital formation and institutional quality affect financial development positively. The empirical results of Wavelet-based quantile-on-quantile estimation method also reveal the heterogeneous response of natural resource rent effect when decomposes into different quantiles that become positive to negative. The results further explain that the natural resource rent has a positive effect in short-run, but it exerts an adverse effect on financial development after attaining stability.