The impact of natural resources on the economic growth of OPEC countries through the financial development channel: A Threshold panel model approach
Subject Areas : Financial Economicsafsaneh baluch rigi nasab 1 , marziyeh esfandiari 2 , reza roshan 3
1 - Department of Economic Sciences, Faculty of Economics and Management, University of Sistan and Baluchestan, Zahedan, Iran.
2 - Department of Economic Sciences, Faculty of Economics and Management, University of Sistan and Baluchestan, Zahedan, Iran.
3 - Educational Department of Economic Sciences, Faculty of Business and Economics, Persian Gulf University, Bushehr, Iran.
Keywords: Natural resource abundance, Economic growth, Financial development, threshold panel model, OPEC member countries,
Abstract :
Despite the abundance of natural resources in OPEC member countries, these countries do not have favorable economic growth. One of the main reasons is that financial markets in these countries are not deep enough. The main purpose of this study is to investigate the impact of natural resource exports on economic growth given the level of financial deepening of OPEC member countries (including Angola, Iran, Indonesia, Ecuador, Qatar, Republic of the Congo, Kuwait, Gabon, Saudi Arabia, Nigeria, and Algeria). For this mean, composite data and panel threshold regression model in the period 2000-2019 were used. The results show that the threshold value for the financial development variable (internal credit of banks to the private sector) equals 4.19. The effect of the abundance of natural resources (oil) on economic growth through the financial development channel is positive and significant for the first regime where the rate of financial deepening is below the threshold, and for the second regime where the rate of financial deepening is above the threshold is not significant. Also in the threshold model, the coefficients of the impact of population growth and inflation on economic growth are negative and the coefficients of the impact of trade openness and gross investment on economic growth have been positive. It seems that in order to positively affect oil exports on the economic growth of OPEC member countries at high levels of financial development, it is necessary to pay attention to all components of financial development and deepen it.
