Growth and development economics
Mohsen Mohammadi Khyareh; reza Mazhari; Zarin Tabe
Abstract
The dynamic relationship between natural resource rents and economic growth has long been associated with the paradox of the "resource curse." However, the role of entrepreneurship as a moderating mechanism in this relationship has received relatively limited attention. This study focuses on both oil-rich ...
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The dynamic relationship between natural resource rents and economic growth has long been associated with the paradox of the "resource curse." However, the role of entrepreneurship as a moderating mechanism in this relationship has received relatively limited attention. This study focuses on both oil-rich and non-oil economies to simultaneously analyze the impact of resource rents and entrepreneurial activities on economic growth, thereby addressing a gap in the literature concerning the trilateral interaction among these variables. Utilizing panel data from 2006 to 2020 and employing the Generalized Method of Moments (GMM), the findings indicate that in oil-based economies, although resource rents independently exert suppressive effects on growth, their convergence with entrepreneurship—through channeling wealth into productive sectors—significantly enhances economic performance. In contrast, in non-oil economies, entrepreneurship emerges as the primary engine of growth independent of resource rents, underscoring the importance of innovation and diversification. Moreover, institutional quality in oil economies is identified as a crucial determinant of the direction (positive or negative) of the impact of resource rents. These results advocate for integrated policy frameworks that strengthen institutions, develop entrepreneurial ecosystems, and reduce reliance on natural resources as prerequisites for sustainable growth in resource-dependent countries.
