Human Capital, Industrial Growth and Resource Curse

Abstract

How the country's natural resource abundance affects the industrial growth? We argue that one of the transmission mechanisms is via the accumulation of country's high skilled human capital. In particular, we empirically investigate whether link between country's natural resource endowment and industry-level growth depends on industry human capital requirement. We show that in the 1980s and the 1990s, industrial sectors that are high-skilled labor intensive developed disproportionately slowly in countries with higher contribution of natural resource sectors to GDP. While low-skilled labor intensity did not differentiate industrial growth between resource rich and resource poor countries. Our findings are in line with the theoretical argument that deteriorative effect of natural resources on the development of industrial sector is a byproduct of the capital accumulation process in the resource abundant open economy that slows down the development of marginally high-skilled labor force compared to the resource poor economies.

Specifics of Public Administration in Countries With a Developed Energy Sector: The Case Study

“…Negative GDP growth rates due to the rollback to the stationary level of per capita income for the country (by GDP per capita) Corden & Neary, 1982;Krugman, 1987;Matsuyama, 1992;Suslova & Volchkova, 2007 Europe ''Dutch disease'' (the Groningen effect) Strengthening of the national currency due to an increase in income from the export of raw materials '' Expenditure effect ''(or ''income use effect'') on the performance of the Nordic countries' disaggregated environmental taxes (Alola & Nwulu, 2022). The result posits the feasibility of Green growth in the panel of Nordic countries while a significant and negative nexus between GDP and energy intensity was also established.…”

Economic Impacts of Renewable Energy on the Economy of UAE

“…This is sometimes referred to as absorption and involves the spread, adoption, adaptation, and application of innovative "green" technology across and within countries. Through the use of alternative energy sources, green innovation and R&D investments may be seen as important drivers in the shaping of economic systems, particularly in the concept of "green economy" growth (Suslova and Volchkova, 2012).…”

An Analysis of the Impact of Rents From Non-Renewable Natural Resources and Changes in Human Capital on Institutional Quality: A Case Study of Kuwait

“…Generally, a few studies have found a link between natural resources, institutional quality, and the human capital. Those that have found a link suggest that high levels of oil production (and resulting incomes) coupled with weak institutions result in little opportunity to improve educational levels (Aljarallah, 2019;Suslova and Volchkova, 2012;Gylfason, 2001;Aron, 2000). Moreover, Bulte et al (2005) found that natural resources damage the institutional quality and then these institutions harm the human capital, thus resource rich countries tend to experience lower levels of human development.…”

“…About this role, Bravo-Ortega and De Gregorio (2005) assert that resource rich countries that have escaped the resource curse tend to have a higher human capital level. Suslova and Volchkova (2012) recommend developing educational policies that are directed towards a skilled labor force, as it is crucial to guarantee the economic development sustainability in resource rich nations. Accordingly, the significant role of the human capital in this study cannot be neglected.…”