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Natural resource access and local economic growth

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  • Gradstein, Mark
  • Klemp, Marc

Abstract

We explore the existence of a local “resource curse” related to Brazil's oil, using oil price annual changes interacted with measures of local proximity to oil reserves. We find that oil royalty-receiving locations in Brazil that are closer to an oil field are characterized by a higher level of income per capita, when controlling for a range of potentially confounding factors. Furthermore, in a panel setting, we find that better geographical access to oil fields generates a greater positive effect of oil prices on local income per capita. Moreover, this positive impact of oilfield proximity on the effect of oil prices is enhanced in oil rich states. Importantly, these effects appear to be independent of the amount of oil royalties, suggesting the role of an indirect linkage effect.

Suggested Citation

  • Gradstein, Mark & Klemp, Marc, 2020. "Natural resource access and local economic growth," European Economic Review, Elsevier, vol. 127(C).
    • Handle: RePEc:eee:eecrev:v:127:y:2020:i:c:s0014292120300738
    DOI: 10.1016/j.euroecorev.2020.103441
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    Cited by:

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    2. Gradstein, Mark & Ishak, Phoebe W., 2020. "We Don't Need No Education: The Effect of Natural Resource Income Shocks on Human Capital," IZA Discussion Papers 14004, Institute of Labor Economics (IZA).
    3. Hamang, Jonas, 2024. "Economic development and known natural resource endowment: Discovery rate differentials of oil," Journal of Development Economics, Elsevier, vol. 170(C).
    4. Zhang, Haoran, 2023. "Coal busts and urban recovery: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 101(C).
    5. Atems, Bebonchu & Mette, Jehu & Lin, Guoyu & Madraki, Golshan, 2023. "Estimating and forecasting the impact of nonrenewable energy prices on US renewable energy consumption," Energy Policy, Elsevier, vol. 173(C).
    6. Syed Hasan & Odmaa Narantungalag, & Martin Berka, 2022. "No pain, no gain? Mining pollution and morbidity," Discussion Papers 2203, School of Economics and Finance, Massey University, New Zealand.
    7. Gradstein, Mark & Ishak, Phoebe W., 2024. "Mother Africa: The long run effects of income shocks on fertility," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 838-849.
    8. Mark Gradstein & Phoebe W. Ishak, 2024. "We Don't Need No Education: The Effect of Income Shocks on Human Capital in Africa," Working Papers 2405, Ben-Gurion University of the Negev, Department of Economics.

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    More about this item

    Keywords

    Local resource curse; Resource access; Oil price shocks;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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