— Whether natural resource abundance benefits or harms the growth has been long a debated issue. The case of transition economies presents an interesting case as major economic transformations can be observed in a relatively short span of time. Following the initial setbacks in the 1990s, natural resource export served as the main source of income in many transition economies. The available cross-country data on natural resource exports includes naturally existing resources like fuels and metals, as well as human-produced resources like agricultural raw materials and food. This paper focuses on fuel and metal resources and finds that their relationship with economic growth is not the same. Cross-sectional empirical analysis of 24 transition countries along with other countries between 1996 and 2010 indicates that despite the fear of resource curse, transition economies indeed benefited from natural resource exports, especially from fuel exports. The negative association of metal exports with economic growth estimated in cross-section regressions can be explained with country specific effects that can be controlled through fixed effects model.
— Economic growth, natural resources, fuel exports, metal exports.
Dashjamts Bayarmaa is with the Graduate School of Economics, Kyushu University, Fukuoka, 812-0053 Japan (e-mail: bayamad@ yahoo.com).
Cite: Dashjamts Bayarmaa, " Good Fuels and Bad Metals in a Growth Story of Transition Economies," Journal of Economics, Business and Management vol. 4, no. 3, pp. 188-194, 2016.