The Influence of Natural Resources Endowment on Country Innovative Outputs

The existence of natural resources is expected to be positively associated with a country’s development. Study results have however remained vague where development that require direct use of natural resources has been found to be positively influenced by resource endowment whereas development that requires investments in other indirect drivers of development like governance institutions, education and infrastructure have been found to be negatively influenced by natural resource endowment. This has made the influence of natural resources on development linked dimensions like innovation remain vague. The widely accepted realization among scholars that the existence of natural resources might be detrimental to the economic development of any country has been referred to as the paradox of plenty or the resource curse theory. This study sought to test the paradox of plenty concept by examining the effect of natural resource endowment of a country on its creative innovation outputs. The main objective was therefore, to test the resource curse theory at country level by investigating whether countries that lack natural resources have higher innovation outputs and vice versa. The main dimension of innovative outputs which the study looked at are: knowledge creation which comprise of patents by origin, utility models by origin, scientific and technical articles and citable documents index and creative goods and services which comprise of cultural and creative services output, national feature films, entertainment and media market, print and other media, as well as creative goods and services exports. Different literature sources were analyzed in relation to the main study objective. The study adopted positivism research philosophy by investigating further evidence that supports the resource curse theory. The study used the correlation research design by testing the kind of relationships that exist between natural resource rents and creative goods and services outputs. The study made use of secondary data obtained from the World Intellectual Property Organization website for the period 2017 to 2019. The data was obtained for 127 countries which formed the population and sample. The study was quantitative in nature, where the deductive approach was applied to make sense of the study findings. Data was analyzed using STATA version 2016 where bivariate linear regression was applied to establish relationships between country natural resources rents and creative goods and services dimensions. The population, which also formed the study sample, consisted of 127 countries from which secondary data was available. Supporting the direct and indirect effect of natural resources on innovation, both positive and negative relationships were obtained for some of the variables. Therefore, the study recommends that countries with high natural resource endowments should not suffer from the Dutch diseases syndrome through being innovatively complacent because of the comfort of having abundant natural resources.