Natural Resource-rich Countries Research Articles

LAND COVER CHANGE ANALYSIS OF CARRASCAL, MADRID AND CANTILAN MINING SITES IN SURIGAO DEL SUR USING REMOTE SENSING

Abstract. The Philippines is recognized as amongst the natural resource-rich countries which has been evident in the influx of extractive industry investors, most specifically in the mining industry. An example of this is the case of mining sites in the municipalities of Carrascal, Madrid, and Cantilan (CMC) in Surigao del Sur region of the Philippines. In this region, development of mining areas was significantly noticeable in a span of seven (7) years since 2015. With this being an alarming case due to its possible negative impacts on the surrounding communities, this study developed an open-source monitoring system of mining activities using remote sensing technologies employing supervised image classification using the Random Forest algorithm. This study is mainly motivated by the need for a monitoring system to ensure responsible mining practices in the country, most especially since there has been an increasing global clamour for a more environmental-friendly and climate-sensitive and sustainable practices. The methodology developed for this study utilized a post-classification change detection approach in which multitemporal land cover (LC) models were produced to capture the land cover changes. To model the LC changes, land cover models for 2015 and 2022 were produced obtaining overall accuracies between 0.93 to 0.95, respectively. Using these models, changes due to mining development were delineated through a multitemporal overlay analysis approach. This change detection model obtained an F1-score of 0.93 indicating high accuracy and satisfactory performance of the model and consequently, the its potential as a mining site monitoring system to achieve the goal of ensuring responsible mining industry practice in the country.

Procyclicality of fiscal policy in oil-rich countries: Roles of resource funds and institutional quality

Fiscal policy management in natural resource-rich countries, particularly the ones struggling with inadequate institutional quality, faces significant challenges because of the dependence of government expenditures on highly volatile revenues of their natural resources. To resolve this issue, most of them have set up natural resource funds; however, the effectiveness of these funds is under debate. Large government expenditures financed by transfers from these funds are not highly likely sustainable and may entail long-term severe economic risks. That brings the necessity of detailed analyses of resource-rich countries' fiscal policy management by integrating the effects of the natural resource funds. This study puts a step forward in this direction; it takes 32 oil-rich countries for the period 1984–2015. Then it analyzes their fiscal policies regarding their government expenditures by unravelling the effects of the presence of the natural resource funds and the adequacy levels of their institutional qualities, categorized with the clustering algorithms. It uses dynamic panel data analysis and elaborates on the proper estimation techniques by considering cross-sectional dependence among data of these countries, heterogeneity of slope coefficients and endogeneity issues. The study reveals that even after controlling the effects of the volatility of the oil price changes and the share of oil rents in total income, resource-rich countries' fiscal policy goes with the flow. In favourable economic conditions, government expenditures are soaring, but when economic downturns happen, their growth levels also turn down. That means high fiscal procyclicality even in the presence of natural resource funds. As expected, the presence of these funds is not sufficient. For the desired countercyclical policy, adequately high enough institutional quality is needed to manage those funds and fiscal policy effectively.

Validating resources curse hypothesis in US: Exploring the relevancy of financial market risk and technology innovation

Countries that have a higher reserve of resources tend to have less developed financial systems. The financial sector plays a vital role in facilitating the conversion of personal savings into business investment and the efficient allocation of limited resources, both of which contribute to economic expansion. Moreover, due to its size, and location, the United States of America possesses a variety of natural resources, including water, oil, gas, coal, farmland, land, coastlines, etc. However, theoretical forecasts for financial growth are conflicting for natural resource-rich countries. Hence this research is conducted to identify the role of Natural Resources (NTR), Technology Innovation (TIN), and Financial Market Risk (FMR) in light of the natural resource curse hypothesis for the USA. Through the application of Bootstrapped ARDL, the findings validate the existence of the resource curse, where TIN is also found to enhance the FD; however, the role of FMR is found to enhance the FD, which might be because of the geographical context of the US where people are assumed to be not risk averse and keep on their investing despite of prevailing market uncertainties. Besides, the identification of the nexus between the aforementioned variables in the presence of the resource curse hypothesis would help corporations and policymakers in developing strategies that can promote sustainable financial development.

The role of sovereign wealth funds in natural resource-rich countries: A systematic meta-narrative review

The role of sovereign wealth funds in natural resource-rich countries: A systematic meta-narrative review

Why do some natural resource-rich countries adopt prudent fiscal rules? An empirical analysis

What is the relationship between natural resource wealth and the adoption of fiscal rules that may help resource-rich states mitigate the effects of a so-called resource curse? We argue that the adoption of fiscal rules by resource-rich countries is conditional on a number of previously unconnected factors, including whether states receive large amounts of rent from natural resources, have high levels of domestic institutional quality, or face external pressure to adopt such rules. Using panel data on 166 countries during the 1985–2015 period and accounting for current levels of democracy and the quality of domestic institutions, we find that countries deriving rents from natural resources are less likely to adopt prudent fiscal rules in general. However, the negative effect of natural resource wealth on the likelihood of states adopting fiscal rules is largely concentrated in countries with low institutional quality. Furthermore, we find that external pressure in the form of fiscal conditionality from the IMF increases the likelihood of states implementing fiscal rules, suggesting that there are ways that states can mitigate the ‘resource curse.’ These findings are robust to alternative data, model specifications, and estimation strategies, including the instrumental variable approach.

Effects of democracy and natural resources on foreign direct investment in African natural resource-rich countries

This article aims to investigate the effects of democracy and natural resources on foreign direct investment (FDI) in African countries rich in natural resources. To this end, an econometric model was estimated using three methods, namely, fixed effects with sample heteroscedasticity correction, the instrumental variables method and the general method of moments, on a panel of 22 countries over the period 2000-2017. On the one hand, the results show that democracy has a positive effect on FDI. On the other hand, the analysis showed that natural resources do not help to attract FDI. Our findings suggest that concrete actions are needed in terms of strengthening and improving governance and democratic institutions to better attract FDI in African countries rich in natural resources.

Effects of democracy and natural resources on foreign direct investment in African natural resource-rich countries

Effects of democracy and natural resources on foreign direct investment in African natural resource-rich countries

The environmental footprint of international business in Africa; The role of natural resources

This paper examines whether the effect of foreign direct investment and trade on the environment differs between natural and non-natural resource countries of Africa. We employ robust econometric modelings such as co-integration, Fully Modified Ordinary Least Square (FMOLS), and causality techniques on 46 African countries between 1985 and 2014. Consistent with the pollution halo hypothesis, we find that both foreign direct investment and trade have a positive impact on non-natural resource-rich countries. On the contrary, in line with the pollution haven argument, we find that FDI and trade to natural resource-rich countries are associated with low environmental quality. Our results, therefore, suggest that non-natural resources-rich countries benefit from FDI and trade via technological transfer from developed countries.

Natural language processing of spatially crowdsourced data in petroleum revenue management

It has been over a decade of petroleum revenue utilisation in Ghana. Yet, there is a dearth of research on Ghanaians’ sentiments on petroleum revenue management in Ghana. However, research indicates that investigating citizens’ sentiments and addressing their grievances could prevent conflicts and promote better revenue utilisation in natural resource-rich countries. So, this study investigated Ghanaians’ sentiments about petroleum revenue management and its contribution to the Free Senior High School (SHS) programme in Ghana through an online survey. The study employed the quantitative approach in which the data was gathered through an online survey questionnaire and analysed using natural language processing techniques. The results show that the participants had negative sentiments about petroleum revenue management and the Free SHS programme in Ghana. However, they trust the managers and anticipate better revenue management in the future. The study recommends that the government should consult broadly with all stakeholders regarding petroleum revenue management to avoid potential conflicts. The article concludes that petroleum revenue managers can combine spatial crowdsourcing and natural language processing to extract citizens’ opinions at specific locations for better revenue management.

Does the financialization of natural resources lead toward sustainability? An application of advance panel Granger non-causality

The financial management of natural resources endowment is necessary to accomplish sustainable economic growth agenda. The previous literature on the elements leading to environmental deterioration has resorted largely to CO2 emissions or ecological footprint following a restrictive approach. A scarce body of studies has noted globalizing environmental pollution components, such as ecological status. The objective of the study is to probe the financialization of natural resources to meet sustainable targets in the context of the top ten natural resource-rich countries spanning the period 1990–2018. Empirical findings, based on a novel panel Granger technique (Juodis et al., 2021), disclose that natural resources contribute to ecological deterioration rather than preserving the environmental performance. Financial markets and institutions, on the other hand, have been effectively serving the environment to curtail the detrimental effects of natural resources on the environmental performance by providing solutions to help regulators to meet their economic and sustainability goals simultaneously. Further, it appears that economic growth validates the EKC hypothesis and leads to alleviating the atmospheric worth in the beginning whilst it preserves the environmental quality after reaching a threshold point. The outcomes documented in this study offer some appropriate policy implications to accomplish sustainable growth objectives.

THE ROLE OF ECONOMIC FREEDOM, TRADE AND TECHNOLOGY ON TOTAL FACTOR PRODUCTIVITY GROWTH

There are many studies on Total Factor Productivity growth in the literature. These studies generally cover the pairwise correlation between total factor productivity growth and other variables. There is not multivariable study. This study examines relationship between economic freedom, human capital, intra-industry trade, foreign direct investment and their interaction effect on total factor productivity growth in natural resource rich and OECD countries. Panel data analysis is used in covering 20 Natural Resource Rich, 34 OECD countries between 1980 and 2014. Instrumental variables and Two Step Generalized Method of Moments are used to model relationship. There is a significant relation between total factor productivity growth and other variables in both models except foreign direct investment in natural resource rich countries.

Does Terms of Trade Matter for Economic Growth? A Focus on Natural Resource-Rich Sub-Saharan African Countries

The contention that deteriorating terms of trade exists in countries that rely heavily on the exploitation and export of natural resources motivated us in this study. We therefore sought to investigate the impact of terms of trade on economic growth in natural resource-rich sub-Saharan African countries. We carried out the study using annual series that span a period of 1990-2019 under the framework of panel Random and Fixed effects. Our findings indicate that a long run relationship exists between GDP and the explanatory variables used in the study. Results also show that, while cross-section random effects indicates that terms of trade positively impacts on GDP, period fixed effects shows that terms of trade negatively impacts on GDP even though it is not significant. Results of our study also show that in all the models, labour force total and FDI have positive impact on GDP, while trade openness impacts on GDP negatively. We therefore recommend that the SSA natural resource-rich countries should diversify their economies away from the traditional natural resources base. Also human capital should be improved through sound education and training, while all the bottlenecks that constrain the inflow of foreign direct investment should be dismantled.

The Heavy Economic Toll of Gender-based Violence: Evidence from Sub-Saharan Africa

The COVID-19 pandemic and lockdowns have led to a rise in gender-based violence. In this paper, we explore the economic consequences of violence against women in sub-Saharan Africa using large demographic and health survey data collected pre-pandemic. Relying on a two-stage least square method to address endogeneity, we find that an increase in the share of women subject to violence by 1 percentage point can reduce economic activities (as proxied by nightlights) by up to 8 percent. This economic cost results from a significant drop in female employment. Our results also show that violence against women is more detrimental to economic development in countries without protective laws against domestic violence, in natural resource rich countries, in countries where women are deprived of decision-making power and during economic downturns. Beyond the moral imperative, the findings highlight the importance of combating violence against women from an economic standpoint, particularly by reinforcing laws against domestic violence and strengthening women’s decision-making power.

Manufacturing Sector Performance and Natural Resources Endowment: Evidence from Natural Resource-rich Sub-Saharan African Countries

Theoretically, it has been observed that an abundance of natural resources that are not well harnessed can displace some vital sectors of the economy, especially the manufacturing sector. In this study, using annual series ranging from 1990-2019 and under the framework of a Panel ARDL, we investigated the link between natural resources endowment and the performance of the manufacturing sector in natural resource-rich SSA countries. Findings of our study show that in the short-run, natural resources endowment has an insignificant positive link with the manufacturing sector performance. However, in the long-run, the contribution of natural resources to the performance of the manufacturing sector becomes negative. On grounds of these findings, we recommend, among others; the diversification of the economies of this group into manufacturing sector by using proceeds from the export of natural resources to develop infrastructure necessary to improve the sector. Keywords : Natural resources, Manufacturing sector, Institutions, Panel ARDL, Employment, Inflation

Non-oil export challenges of oil countries in case of Azerbaijan

The purpose of the article is to analyze the trade sector of Azerbaijan for the last decades and to determine the competitive advantages of the agricultural sector. Research methods. Due to analysis current situation, Reveal Competitive Advantage, Herfindahl-Hirschman market concentration index and descriptive statistical analysis are used in this paper. Research results. The Agricultural sector can be one of the main drivers of economic development in natural resource-rich countries. On the other hand, due to crowding out effect of oil sector, agricultural sector lags behind of its potential. At the same time, trade dependency on oil related sectors and diversification of export products and destinations are very significant for the future economic perspectives of resource-rich countries. Scientific novelty. Our analysis show that Azerbaijan’s dependency on natural resources affected significantly on export diversification and country need to diversify its exported product and export destinations to ensure trade security. Furthermore, analysis reveals that agricultural products have tremendous potential to be globally competitive in compare to other produced goods in the country. Practical significance. Current and forward-looking research on export trends, RCA issues and export diversification will help government agencies and government agencies to monitor and develop current strategies to overcome the negative effects of resource dependence in Azerbaijan. Tabl.: 6. Figs.: 4. Refs.: 33.

Pass-through of commodity price to Mongolian stock price: Symmetric or asymmetric?

Mongolia is a natural resource-rich country, so that its stock market is highly dependent on price fluctuations of commodities, particularly copper and coal. One crucial problem is that the responses of the stock market performance to a shock of the commodity price can be nonlinear or asymmetric. This study addresses such asymmetric linkages by applying nonlinear autoregressive distributed lags (NARDL) models during the period from January 2007 to December 2018. The results show clear evidence of asymmetric long-run relationships between stock price and the commodity price, supporting that different behaviors of stock price in response to positive and negative shocks on the commodity price. Specifically, our analysis presents a positive relationship between copper price and stock price in the case of a positive shock on copper price, but no clear relationship in the case of a negative shock on copper price. The results also reveal a positive relationship between coal price and stock price in the case of a negative shock on coal price, but no clear relationship in the case of a positive shock on coal price. The Mongolian stock market is favorably sensitive to an increase in copper price but vulnerable to a decline in coal price. Possible explanations behind the results are also discussed.

Dutch Disease Perspective on Vegetable Exports in the Azerbaijan Economy

Agriculture or agrarian sectors together with non-resource manufacturing can be the key drivers of non-mineral development among natural resource-rich countries. However, agricultural development lags behind the extractive industry which puts a big share of the labor force into an uncertain position and creates food security risks. In Azerbaijan, which is an oil-rich post-soviet country, details focus on individual exports like vegetable exports that have not been carried out against specific economic indicators such as the Extractives Dependence Index (EDI), the Real Effective Exchange Rate (REER), etc. This paper is based on one-way variance analysis (ANOVA) and Tukey’s honest significance test (Tukey’s HSD test), as well as the Granger causality test. Our analysis shows that Azerbaijan’s dependency on natural resources (measured by the EDI) has a significant effect on the value of vegetable exports. Moreover, the Granger causality test revealed a one-side causal relationship from the REER and production costs to the vegetable exports, at a 10% significance level. Similarly, a unidirectional Granger causal relationship from crude oil prices to the REER, at a 1% significance level was found. Thus, our findings indicate that overall Dutch disease affects the Azerbaijan economy towards vegetable exports. 

Foreign Capital, Natural Resource Rents and Financial Development: A New Approach

This article explores the impact of financial development on the ‘natural resources rents–foreign capital accumulation nexus’ in selected natural resource–rich countries during 1970Q1–2016Q4. In doing so, we propose a new approach by applying the autoregressive distributed lag (ARDL) rolling regression technique for our empirical purpose. The results show that financial development has a positive and significant effect on the way natural resource rents affect foreign capital in the case of Australia, Chile, Ecuador, Egypt and Peru in both the short run and the long run. We achieve the same results in the case of Colombia and Iran too, but just in the long run. Also, short-term and long-term negative effects of financial development on the rents–foreign capital nexus are witnessed just in the case of Algeria. We provide some empirical evidence for further robustness of our findings. Finally, we suggest that there is a necessity for the development of the financial system in natural resource–rich countries to reach higher levels of foreign capital, which has a crucial role in their economic growth.

Carbon curse in developed countries

Among the ten countries with the highest carbon intensity, six are natural resource-rich countries. This suggests the existence of a carbon curse: resource-rich countries would tend to follow more carbon-intensive development paths than resource-poor countries. We investigate this assumption empirically using a panel data method covering 29 countries (OECD and BRIC) and seven sectors over the 1995-2009 period. First, at the macroeconomic level, we find that the relationship between national CO 2 emissions per unit of GDP and abundance in natural resources is U-shaped. The carbon curse appears only after the turning point. Second, we measure the impact of resource abundance on sectoral emissions for two groups of countries based on their resource endowments. We show that a country rich in natural resources pollutes relatively more in resource-related sectors as well as all other sectors. Our results suggest that the debate on climate change mitigation should rather focus on a comparison of resource-rich countries versus resource-poor countries than the developed-country versus developing-country debate.

Firm Performance And Environmental Munificence: Perspectives Of Differential Performance

Why some firms perform well in natural resource-poor countries (NRPC) and others perform poorly in natural resource-rich countries (NRRC) has become significant in this era of resource booms and heavy natural resource dependence of emerging economies. Drawing from political economy and strategic management theoretical perspectives I use longitudinal multilevel and differential prediction techniques to examine the question. Data from 3,425 firms in 46 countries during the period 2007-2016 show that firms in NRPCs tend to perform better than those in NRRCs. Three factors each from political economy and strategic management account for the differential prediction. I discuss the theoretical and practical implications of the findings for organization scholarship in strategic management.