Identifying the key factors of growth in natural resource-driven countries. A look from the knowledge-based economy

The effect of natural resources (NR) on growth has been a topic widely discussed in the economics literature. The evidence shows a predominant negative impact of this, but this can be neutralized if countries adopt a more knowledge-intensive industrial structure. This paper seeks to explore the key factors for growth in natural resource-driven countries under a knowledge economy perspective, providing new evidence that corroborates how a development path based on NR is plausible when some conditions are present. Performing cluster and panel data analyses, our findings reveal the essential role of openness and Foreign direct investment (FDI) to access foreign technologies as key driving factors. Meanwhile, the case of Chile confirms the importance of intangibles for a country's growth, and demonstrates that a weak innovation capability can become a serious blockage for sustained progress despite the successful advance in other dimensions.

[1]  Xiaming Liu,et al.  Foreign Direct Investment and Economic Growth: An Increasingly Endogenous Relationship , 2005 .

[2]  F. Block,et al.  Networks and Public Policies in the Global South: The Chilean Case and the Future of the Developmental Network State , 2012 .

[3]  F. Castellacci,et al.  A new panel dataset for cross-country analyses of national systems, growth and development (CANA) , 2011 .

[4]  Jeffrey D. Sachs,et al.  The curse of natural resources , 2001 .

[5]  Knut Bjørn Lindkvist,et al.  Conventions and Innovation: A Comparison of Two Localized Natural Resource-based Industries , 2008 .

[6]  W. Loiskandl,et al.  Innovation Systems Research Sustainable Natural Resource Use in Least Developed Countries , 2011 .

[7]  D. Foray.  Economics of knowledge , 2004 .

[8]  Esteban Pérez Caldentey.  Income Convergence, Capability Divergence, and the Middle Income Trap: An Analysis of the Case of Chile , 2012 .

[9]  The Problem of the Commons: Still Unsettled After 100 Years , 2011 .

[10]  J. Sachs,et al.  Natural Resource Abundance and Economic Growth , 1995 .

[11]  La nueva perspectiva para la creación de valor , 2004 .

[12]  W. Max Corden,et al.  Booming Sector and De-Industrialisation in a Small Open Economy , 1982 .

[13]  Frederick van der Ploeg,et al.  Natural Resources: Curse or Blessing? , 2010, SSRN Electronic Journal.

[14]  P. David,et al.  AN INTRODUCTION TO THE ECONOMY OF THE KNOWLEDGE SOCIETY , 2001 .

[15]  M. Kunc,et al.  National Systems of Innovations and Natural Resources Clusters: Evidence from Copper Mining Industry Patents , 2009 .

[16]  R. Fuentes,et al.  Pautas de especialización en una economía de rápido crecimiento. El caso de Chile , 2017 .

[17]  F. Castellacci.  A Critical Realist Interpretation of Evolutionary Growth Theorising , 2006 .

[18]  Andrew Rosser,et al.  The political economy of the resource curse : a literature survey , 2006 .

[19]  S. Ville,et al.  The Dynamics of Resource-Based Economic Development: Evidence from Australia and Norway , 2013 .

[20]  Sang M. Lee,et al.  Open innovation in the public sector of leading countries , 2012 .

[21]  D. Lederman,et al.  Natural Resources, Neither Curse nor Destiny , 2006 .

[22]  James A. Robinson,et al.  Why nations fail ? The origins of Power , Prosperity and Poverty , 2015 .

[23]  J. Sachs,et al.  The big push, natural resource booms and growth , 1999 .

[24]  D. Rodrik.  One Economics, Many Recipes: Globalization, Institutions, and Economic Growth , 2007 .

[25]  Gavin Wright,et al.  The Origins of American Industrial Success, 1879-1940 , 1990 .

[26]  J. Fagerberg,et al.  The Competitiveness of Nations: Why Some Countries Prosper While Others Fall Behind , 2007 .

[27]  Michael L. Ross,et al.  What Do We Know about Natural Resources and Civil War? , 2004 .

[28]  The Natural Resource Curse: A Survey , 2010 .

[29]  Keith Smith.  Innovation and growth in resource-based economies , 2007 .

[30]  A. Kokko,et al.  From Natural Resources to High-Tech Production: The Evolution of Industrial Competitiveness in Sweden and Finland , 2003 .

[31]  Joel Mokyr,et al.  The contribution of economic history to the study of innovation and technical change: 1750-1914 , 2010 .

[32]  G. Dosi.  Sources, Procedures, and Microeconomic Effects of Innovation , 1988 .

[33]  Ragnar Torvik,et al.  Cursed by Resources or Institutions? , 2006 .

[34]  Arne Isaksen,et al.  Innovation by co-evolution in natural resource industries: The Norwegian experience , 2011 .

[35]  X. S. I. Martín.  Apuntes de crecimiento económico , 1994 .

[36]  Aart Kraay,et al.  Government Matters III : Governance Indicators for 1996-2002 , 2003 .

[37]  Daniel E. Sichel,et al.  Intangible Capital and U.S. Economic Growth , 2006 .

[38]  M. Arellano,et al.  Another look at the instrumental variable estimation of error-components models , 1995 .

[39]  Giovanni Dosi,et al.  Technical Change and Industrial Dynamics as Evolutionary Processes , 2009 .

[40]  Jaime Sanaú,et al.  Interrelationship among institutional infrastructure, technological innovation and growth. An empirical evidence , 2007 .

[41]  Á. Hurtado.  Development in Chile 1990–2005: Lessons from a Positive Experience , 2007 .

[42]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[43]  Camilla Mastromarco,et al.  Foreign Capital, Human Capital, and Efficiency: A Stochastic Frontier Analysis for Developing Countries , 2009 .

[44]  Fulvio Castellacci,et al.  The dynamics of national innovation systems: A panel cointegration analysis of the coevolution between innovative capability and absorptive capacity , 2013 .

[45]  L. Soete,et al.  Catching up in the 21st century: globalization, knowledge & capabilities in Latin America, a case for natural resource based activities , 2011 .

[46]  Thorvaldur Gylfason,et al.  Natural Resources and Economic Growth: The Role of Investment , 2001 .