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The effectiveness of geopolitical risk, load capacity factor, and urbanization on natural resource rent: Evidence from top ten oil supplier countries

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  • Erdogan, Sinan
  • Pata, Ugur Korkut
  • Kartal, Mustafa Tevfik

Abstract

Natural resources are of strategic importance for the economic and social development of countries. Various macroeconomic factors can affect natural resource rent (NAT). In this context, this study examines the impact of labor force, GDP, population density, urbanization, trade openness, geopolitical risk (GR), and load capacity factor (LCF) on NAT for the top 10 oil suppliers. For this purpose, the study uses the Cross-Sectional Augmented Distributed Lag (CS-ARDL) approach from 1992/1 to 2021/12. The study results indicate that GDP, GR, labor force, and trade openness increase NAT, whereas urbanization has no impact on NAT. It is also found that population density and LCF reduce NAT. The findings suggest that the upsurge in geopolitical risk can stimulate natural resource extraction in the top 10 oil supplier countries while improving the regenerative capacity of the environment of these societies can reduce NAT activities. Policymakers should consider these results when determining NAT policies.

Suggested Citation

  • Erdogan, Sinan & Pata, Ugur Korkut & Kartal, Mustafa Tevfik, 2024. "The effectiveness of geopolitical risk, load capacity factor, and urbanization on natural resource rent: Evidence from top ten oil supplier countries," Resources Policy, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:jrpoli:v:96:y:2024:i:c:s0301420724005919
    DOI: 10.1016/j.resourpol.2024.105224
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