Natural resources and national productivity in Africa: are there differences in high and low globalized economies?

Abstract

PurposeThis paper aims to examine the effect of natural resources on the national productivity of high and low globalized economies in Africa.Design/methodology/approachThis study uses two-step generalized method of moments dynamic panel data of 30 African economies between 2006 and 2016 to achieve the purpose of the study.FindingsThe results suggest that natural resources promote productivity within African economies regardless of the level of globalization. However, while natural resources have an overall enhancing effect on national productivity in both high and low globalized economies, the enhancing effect varies according to the forms of globalization. The findings of this study suggest that globalization can alter the nexus between natural resources and national productivity in Africa. The results imply that African Governments and their related policymakers can rely on globalization to promote the effect of natural resources on productivity of African economies.Practical implicationsThis result is good and welcoming news, especially when natural resources in Africa have been described by prior studies as a curse to the continent. While globalization can be a tool for policymakers in Africa to deploy the positive effect of natural resources on national productivity, they might as well be careful as to which form of globalization they pursue, given that different forms and different levels or extent (high or low) of globalization yields different results on the nexus between natural resources and national productivity.Originality/valueTo the best of the authors’ knowledge, this study is the first of its kind to examine how natural resources affect national productivity in high and low globalized economies, especially in Africa.