Natural resource access and local economic growth

Mark Gradstein, Marc Klemp

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

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.

Original languageEnglish
Article number103441
JournalEuropean Economic Review
Volume127
DOIs
StatePublished - 1 Aug 2020

Keywords

  • Local resource curse
  • Oil price shocks
  • Resource access

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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