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Natural Resources, Innovation, and Growth

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  • Elissaios Papyrakis

    (IVM/VU Institute for Environmental Studies, Vrije Universiteit)

Abstract

This paper investigates the connection between resource abundance and innovation, as a transmission mechanism that can elucidate part of the resource curse hypothesis; i.e. the observed negative impact of resource wealth on income growth. We develop a variation of the Ramsey-Cass-Koopmans model with endogenous growth to explain the phenomenon. In this model, consumers trade off leisure versus consumption, and firms trade off innovation efforts versus manufacturing. For this model, we show that an increase in resource income frustrates economic growth in two ways: directly by reducing work effort and indirectly by inducing a smaller proportion of the labor force to engage in innovation.

Suggested Citation

  • Elissaios Papyrakis, 2004. "Natural Resources, Innovation, and Growth," Working Papers 2004.129, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2004.129
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    Cited by:

    1. Parlee, Brenda L., 2015. "Avoiding the Resource Curse: Indigenous Communities and Canada’s Oil Sands," World Development, Elsevier, vol. 74(C), pages 425-436.
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    3. Ampofo, Gideon Kwaku Minua & Cheng, Jinhua & Asante, Daniel Akwasi & Bosah, Philip, 2020. "Total natural resource rents, trade openness and economic growth in the top mineral-rich countries: New evidence from nonlinear and asymmetric analysis," Resources Policy, Elsevier, vol. 68(C).
    4. Cao, Dongqin & Peng, Can & Yang, Guanglei & Zhang, Wei, 2022. "How does the pressure of political promotion affect renewable energy technological innovation? Evidence from 30 Chinese provinces," Energy, Elsevier, vol. 254(PA).
    5. Xiaohong Liu & Meiwen Zhang, 2022. "The Impact of Market Integration on Renewable Energy Technology Innovation: Evidence from China," Sustainability, MDPI, vol. 14(21), pages 1-14, October.
    6. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Shahbaz, Muhammad, 2020. "Are too many natural resources to blame for the shape of the Environmental Kuznets Curve in resource-based economies?," Resources Policy, Elsevier, vol. 68(C).
    7. Henry Willebald & Marc Badia-Miró & Vicente Pinilla, 2015. "Natural Resources and Economic Development. Some lessons from History," Documentos de Trabajo (DT-AEHE) 1504, Asociación Española de Historia Económica.
    8. Chekouri, Sidi Mohamed & Benbouziane, Mohamed & Chibi, Abderrahim, 2017. "Oil rents and institutional quality: empirical evidence from Algeria," MPRA Paper 81862, University Library of Munich, Germany, revised Sep 2017.
    9. Elmawazini, Khaled & Atallah, Gamal & Rafiquzzaman, Mohammed & Guesmi, Khaled, 2022. "Do regulatory policies matter to corporate innovation?," International Review of Financial Analysis, Elsevier, vol. 84(C).

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    More about this item

    Keywords

    Natural resources; Growth; Innovation;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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