Abstract
Abundant natural resources play an important role in boosting economic growth. However, as the Dutch disease emerged in the 1970s, innumerable researchers were attracted to investigate the negative impact of abundant natural resources on economic growth. The issue has been rigorously discussed in a large number of previous studies. However, they did not investigate the effect of economic growth on natural resource abundance. Therefore, this study embarks on an investigation into the effect of economic growth on natural resource abundance in selected ASEAN countries, namely Thailand, Singapore, Malaysia, Brunei, the Philippines, Vietnam, Cambodia and Indonesia. This study employs the static panel method to analyse data ranging from 2000 to 2016. The results show that foreign direct investment and direct investment can have negative impacts on natural resource abundance. An increase in economic growth, on the other hand, can have a positive impact of natural resource abundance. Other factors such as financial development, trade openness and governance do not influence natural resource abundance. Therefore, these findings can shed light for policymakers to formulate policies for future references as the outcomes based on before the spread of Covid-19 diseases. The countries can enhance economic growth to pave the way for more exploration of natural resources. Higher economic growth can lead to more advanced technologies and thus it is easy to extract more natural resources. Foreign direct investment and direct investment should be controlled to ensure that natural resources will not be exhausted.Keywords: natural resource abundance; economic growth; static panel; ASEANJEL Classifications: O13, Q32, Q33, Q38, Q56DOI: https://doi.org/10.32479/ijeep.10615
Highlights
Natural resources, especially oil, gas and coal, are of utmost importance in generating economic activities
The findings contribute to the existing literature that investigated the relationship between abundant natural resources and economic growth to validate the natural resources curse hypothesis in ASEAN countries
We find that there is a relationship between domestic investment and economic growth depending on the level of natural resources abundance
Summary
Especially oil, gas and coal, are of utmost importance in generating economic activities. Lower imports due to less independence and higher exports attributed to natural resource dependence can lead to higher economic growth. It is not always tenable as it is dependent on how they manage their resources. Our justification for the exploration is that countries with higher economic growth have advanced technologies (Zhou and Luo, 2018) and they can discover more natural resources such as oil, gas and coal. Thailand’s economy grew at a slow pace with average growth of 3.04
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