NATURAL RESOURCES, CONFLICT AND GROWTH: UNCOVERING THE TRANSMISSION MECHANISM
Journal Title: Asian Economic and Financial Review - Year 2014, Vol 4, Issue 8
Abstract
Using panel data and GMM estimators for the developed countries (DCs) and the less developed countries (LDCs) we find a positive and significant impact of conflict on DC GDP and a negative and significant impact on LDC GDP during the period 1980-2009. Our result on conflict is robust irrespective of model specification and country categorization. Both fuel and ores and minerals have a positive and significant impact on GDP in the LDCs in some specifications contradicting the predominant ?resource curse? view. While openness has a negative and significant impact on GDP in the LDCs. Government expenditure has a negative and significant impact in DCs in one specification, which is an interesting finding in view of the social expenditure reductions in the DCs post 9/11. The use of panel data ensures that non-stationarity of the variables is not a problem and the use of GMM estimators yields estimates that are not biased on account of endogeneity.
Authors and Affiliations
Shahida Wizarat| Director Research, Chief Editor Pakistan Business Review & HOD Economics, Institute of Business Management (IOBM), Karachi, Pakistan
Keywords
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