Impact of Natural Resource Rents and Institutional Quality on Human Capital: A Case Study of the United Arab Emirates

Aljarallah, Ruba A.

doi:10.3390/resources8030152

Cited by 11 publications

(8 citation statements)

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“…First, the study has integrated the concepts of resource governance, institutional quality, and resource-based economic sustainability. Extant research (e.g., Apergis 2014 ; Aluu 2019 ; Aljarallah 2019 ) have tended to explore the concept of resource endowments and resulted resource curse with a limited focus on the causal relationships between the aforementioned phenomena. This study has shed some light on the holistic and integrative theoretical model framing the role of resource governance and institutional quality on ensuring a wide spectrum of the resource sector benefits in terms of economic, social, and environmental contribution.…”

Section: Discussion Implications and Avenues For Further Researchmentioning

confidence: 99%

Institutional quality and resource-based economic sustainability: the mediation effects of resource governance

Kansheba

Marobhe

2022

SN Bus Econ

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The discovery of extractive resources is associated with multiple opportunities and unbridled optimism on achieving socio-economic development for many countries. However, the question how the host governments meet expectations of indigenous people by ensuring an ideal resource-based economic sustainability (RES) has been receiving less research attention. Using the global panel dataset of 80 resource-endowed economies from 2010 to 2017, we postulate and empirically examine the mediating effect of the resource governance (RESOGV) on the relationship between institutional quality (IQ) and RES. The ANOVA and post hoc ANOVA results revealed significant disparities in terms of IQ, RESOGV, and RES among countries with different levels of economic development, regions, and sector (mining or petroleum). Moreover, the fixed effects (FE) and ordinary least square (OLS) results confirmed that IQ marginally influenced RES. However, the influence was more pronounced when it was partially (but complementarily) mediated by the RESOGV. The paper, therefore, stresses the importance of host governments in improving the quality of their institutions. This will ultimately help enhancing their RESOGV capabilities for attaining economic, social and environmental sustainability.

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Section: Discussion Implications and Avenues For Further Researchmentioning

confidence: 99%

Institutional quality and resource-based economic sustainability: the mediation effects of resource governance

Kansheba

Marobhe

2022

SN Bus Econ

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“…Approximately 6 years have been added to life expectancy at birth, 6.5 years to schooling, and 4 years to expected education. The UAE has successfully used its natural endowments for economic development and enhanced well-being, but this does not preclude the possibility that some of the manifestations of the resource curse persist [16,24], which is the focus of the current investigation. The UAE's well-being status, as captured by the HDI continuously improved between 1990 and 2019.…”

Section: The Uae Economy: Stylized Factsmentioning

confidence: 99%

“…The UAE generated 165.6 million tons of oil in 2020, accounting for an estimated 5.6% of worldwide oil reserves [23]. However, despite the country's successful use of its resource endowments for economic advancement and improved well-being, some manifestations of the resource curse may persist [16,24]. Therefore, the UAE faces a critical policy challenge in determining how to thrive within its ecological boundaries.…”

Section: Introductionmentioning

confidence: 99%

Can the Resource Curse for Well-Being Be Morphed into a Blessing? Investigating the Moderating Role of Environmental Quality, Governance, and Human Capital

ElMassah

Hassanein

2022

Sustainability

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One of the most pressing global concerns is ensuring high levels of human well-being without overburdening natural resources. The impact of natural resource abundance on the economy’s monetary dimensions has long been controversial, with researchers debating whether it is a blessing or a curse. Recently, focus has shifted to its impact on non-monetary attributes (i.e., human well-being), with conflicting empirical evidence with respect to existence of the resource curse. However, studies on the indirect impact of natural resources on well-being are rare. This inquiry extends previous research by investigating the effect of natural resource abundance on human well-being and the underlying mechanisms that may clarify the convoluted link between the two variables in the UAE from 1990 to 2019. The novel contribution of this research is the evaluation of the resource curse concept from a broader perspective by considering how resource endowments indirectly affect human well-being via environmental quality, human capital, and governance channels. To this end, in the present study, we utilized the autoregressive distributed lag (ARDL) technique for cointegration and deployed the vector error correction model (VECM) for causality investigation. The ARDL results indicate cointegrated variables with diverse integration orders, signifying a long-term bond. Furthermore, the outcomes endorse the notion that resource endowment is inversely related to well-being as calibrated by the Human Development Index (HDI), corroborating the “Resource Curse Concept”, whereby large resource endowments impede human well-being. In terms of transmission channels, natural resources improve human well-being through environmental quality. In contrast, both human capital and governance have insignificant impacts on the influence of natural resources on well-being. Therefore, resource endowments improve human well-being as long as they do not harm the environment. The present analysis also resulted in the development of a feedback hypothesis between natural resource endowments and human well-being. The findings of this study provide several insights into the control of the direct and indirect adverse effects of natural resources on human well-being, the foremost being the provision of incentives for low-carbon energy use, reducing energy intensity, and assisting businesses engaged in R&D to minimize the cost of employing renewables, as well as investments in low-carbon technologies/cleantech and environmental technologies.

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“…It is discovered that there exists a positive and significant relationship between natural resources and economic growth for both UAE and Saudi Arabia, while there exists an insignificant relationship between natural resources and economic growth for Oman. Also, based on the ARDL and error correction model (ECM), Aljarallah (2019) investigates the impacts of natural resource rents and institutional quality on human capital. While the author employs corruption and law and order in place of institutional quality, results indicate that natural resource rents and corruption have substantial negative impacts on human capital, but law and order has a positive impact on human capital.…”

Section: Empirical Reviewmentioning

confidence: 99%

Interconnections between governance shortcomings and resource curse in a resource-dependent economy

Fagbemi

Kotey

2022

PRR

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PurposeThe paper assesses the role of natural resource rents in Nigeria's economy through the channel of institutional quality.Design/methodology/approachThe analysis is done with the use of autoregressive-distributed lag (ARDL) bounds testing approach to cointegration, vector error correction model (VECM), Granger causality test and cointegrating regression over the period 1996–2019.FindingsFindings support the notion that overreliance on natural resources could exacerbate the growing number of dysfunctional economic outcomes in the country. The study confirms that a mix of weak governance quality and natural resource rents could have a negligible effect on economic growth and possible retardation impact on the economy in the long run as well as in the short run. The evidence further reveals that there is unidirectional causality running from the interaction term to growth, suggesting that growth trajectory could be jointly determined by natural resource rents and the quality of institutions.Originality/valueThe divergent arguments associated with the mechanisms of resource curse in each of the resource-rich countries offer ample support for the contention that economic outcomes in resource-abundant states may not be a product of resource windfalls per se, but rather the quality of governance or ownership structure. Hence, the ultimate aim of the analysis is to further understanding on the link between resource rents and growth in Nigeria via governance channel.

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Impact of Natural Resource Rents and Institutional Quality on Human Capital: A Case Study of the United Arab Emirates

Cited by 11 publications

References 50 publications

Institutional quality and resource-based economic sustainability: the mediation effects of resource governance

Institutional quality and resource-based economic sustainability: the mediation effects of resource governance

Can the Resource Curse for Well-Being Be Morphed into a Blessing? Investigating the Moderating Role of Environmental Quality, Governance, and Human Capital

Interconnections between governance shortcomings and resource curse in a resource-dependent economy

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