Identifying the role of natural resources in knowledge-based strategies of development

Knowledge has adopted a preferential role in the explanation of development while the evidence about the effect of natural resources in countries’ performance is more controversial in the economic literature. This paper tries to demonstrate that natural resources may positively affect growth in countries with a strong natural resources specialization pattern although the magnitude of these effects depend on the type of resources and on other aspects related to the production and innovation systems. The positive trajectory described by a set of national economies mainly specialized in natural resources and low-tech industries invites us to analyze what is the combination of factors that serves as engine for a sustainable development process. With panel data for the period 1996-2008 we estimate an applied growth model where both traditional factors and other more related to innovation and absorptive capabilities are taken into account. Our empirical findings show that according to the postulates of a knowledge-based approach, a framework that combines physical and intangible factors is more suitable for the definition of development strategies in those prosperous economies dominated by natural resources and connected activities, while the internationalization process of activities and technologies become also a very relevant aspect.

[1]  F. Castellacci.  Innovation and the competitiveness of industries: comparing the mainstream and the evolutionary approaches , 2008 .

[2]  Fabrizio Zilibotti,et al.  Horizontal Innovation in the Theory of Growth and Development , 2005 .

[3]  P. Romer.  Endogenous Technological Change , 1989, Journal of Political Economy.

[4]  Eleonora Cavallaro,et al.  Technological catching up, competitiveness and growth , 2009 .

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

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

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

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

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

[10]  C. Pérez.  A Vision for Latin America: A resource-based strategy for technological dynamism and social inclusion , 2008 .

[11]  W. H. Furtan,et al.  The Effect of Innovation on Agricultural and Agri-food Exports in OECD Countries , 2007 .

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

[13]  Edward B. Barbier,et al.  The Role of Natural Resources in Economic Development , 2003 .

[14]  Roberto Esposti,et al.  Modelling technical change in Italian agriculture: a latent variable approach , 2000 .

[15]  David Roodman,et al.  A Note on the Theme of Too Many Instruments , 2008 .

[16]  David Roodman.  How to do Xtabond2: An Introduction to Difference and System GMM in Stata , 2006 .

[17]  A. Teixeira,et al.  Does structure influence growth? A panel data econometric assessment of “relatively less developed” countries, 1979–2003 , 2011 .

[18]  Jasjit Singh.  Distributed R&D, Cross-Regional Knowledge Integration and Quality of Innovative Output , 2006 .

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

[20]  Araújo,et al.  An Evolutionary theory of economic change , 1983 .

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

[22]  M. Henning,et al.  Decomposing the Technology Shift. Evidence from the Swedish Manufacturing Sector , 2008 .

[23]  Alvaro Cuervo‐Cazurra,et al.  Transforming disadvantages into advantages: developing-country MNEs in the least developed countries , 2008 .

[24]  J. Fagerberg,et al.  National innovation systems, capabilities and economic development , 2008 .

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

[26]  J. Dunning.  Regions, globalization, and the knowledge-based economy , 2002 .

[27]  Jeffrey L. Furman,et al.  The Determinants of National Innovative Capacity , 2000 .

[28]  J. A. Smulders,et al.  Pollution abatement and long-term growth , 1996 .

[29]  Watu Wamae,et al.  Innovation and the Development Agenda , 2010 .

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

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

[32]  A. Goldstein.  Multinational companies from emerging economies : composition, conceptualization and direction in the global economy , 2009 .

[33]  S. Smulders.  Endogenous Technical Change , Natural Resources and Growth , 2004 .

[34]  A. Karami,et al.  NATURAL RESOURCE ABUNDANCE, HUMAN CAPITAL AND ECONOMIC GROWTH IN THE PETROLEUM EXPORTING COUNTRIES , 2010 .

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

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

[37]  J. Schumpeter.  The Creative Response in Economic History , 1947, The Journal of Economic History.

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

[39]  N. Bontis.  National Intellectual Capital Index : A United Nations Initiative for the Arab Region , 2002 .

[40]  Jan Fagerberg,et al.  Technology and International Differences in Growth Rates , 1994 .

[41]  J. Dunning.  Location and the Multinational Enterprise: A Neglected Factor? , 1998 .

[42]  L. Bretschger.  Economics of technological change and the natural environment: How effective are innovations as a remedy for resource scarcity? , 2005 .

[43]  Rajneesh Narula,et al.  Multinational Enterprises, Development and Globalization: Some Clarifications and a Research Agenda , 2010 .

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

[45]  J. Ang,et al.  Catching Up to the Technology Frontier: The Dichotomy Between Innovation and Imitation , 2010 .

[46]  M. Porter,et al.  The Competitive Advantage of Nations. , 1990 .

[47]  Leif Edvinsson.  The Intellectual Capital of Nations , 2004 .

[48]  Daniel Lederman,et al.  From Natural Resources to the Knowledge Economy: Trade and Job Quality , 2002 .

[49]  Nick von Tunzelmann,et al.  Innovation In “Low-Tech” Industries , 2006 .

[50]  V. Donoso,et al.  Exportaciones y Crecimiento en España (1980-2004): Cointegración y Simulación de Montecarlo , 2006 .

[51]  R. Stavins,et al.  The Problem of the Commons: Still Unsettled after 100 Years , 2010 .

[52]  M. Arellano,et al.  Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations , 1991 .

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

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

[55]  L. Edvinsson,et al.  National intellectual capital: comparison of the Nordic countries , 2008 .

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

[57]  P. Howitt,et al.  Endogenous Growth Theory , 1999 .

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

[59]  A. Madhok,et al.  Emerging Multinationals, Emerging Theory: Macro- and Micro-Level Perspectives , 2010 .

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

[61]  B. Lundvall.  Dynamics of Industry and Innovation: Organizations, Networks and Systems National Innovation Systems -analytical Concept and Development Tool National Innovation Systems -analytical Concept and Development Tool National Innovation Systems -analytical Concept and Development Tool , 2022 .

[62]  John L. Pender.  Population growth, agricultural intensification, induced innovation and natural resource sustainability: An application of neoclassical growth theory , 1998 .

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

[64]  Michael L. Ross,et al.  The Political Economy of the Resource Curse , 1999, World Politics.

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

[66]  Fulvio Castellacci,et al.  Innovation, diffusion and catching up in the fifth long wave , 2006 .

[67]  Bart Verspagen,et al.  Technology-gaps, innovation-diffusion and transformation:an evolutionary interpretation , 2002 .

[68]  R. Rigobón,et al.  Resource Curse or Debt Overhang? , 2001 .

[69]  J. Piesse,et al.  Agricultural R&D, technology and productivity , 2009, Philosophical Transactions of the Royal Society B: Biological Sciences.

[70]  R. Solow.  A Contribution to the Theory of Economic Growth , 1956 .

[71]  José De Gregorio,et al.  The Relative Richness of the Poor? Natural Resources, Human Capital, and Economic Growth , 2005 .

[72]  Edward B. Barbier,et al.  Endogenous Growth and Natural Resource Scarcity , 1999 .

[73]  M. León-Ledesma,et al.  Accumulation, innovation and catching-up: an extended cumulative growth model , 2002 .

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

[75]  F. Castellacci.  Evolutionary and New Growth Theories - Are They Converging? , 2007 .

[76]  Bart Verspagen,et al.  The Role of Innovation in Development , 2010 .

[77]  Hendrik van den Berg,et al.  Foreign Direct Investment and Economic Growth: A Time-Series Approach , 2006 .

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

[79]  Fulvio Castellacci,et al.  Technological regimes and sectoral differences in productivity growth , 2007 .