The Shifting Natural Wealth of Nations: The Role of Market Orientation

49 Pages Posted: 28 Aug 2018

See all articles by Rabah Arezki

Rabah Arezki

World Bank

Rick van der Ploeg

University of Oxford

Frederik Toscani

International Monetary Fund

Date Written: July 11, 2018

Abstract

This paper explores the effect of market orientation on (known) natural resource wealth using a novel dataset of world-wide major hydrocarbon and mineral discoveries. Consistent with the predictions of a two-region model, the empirical estimates based on a large panel of countries show that increased market orientation causes a significant increase in discoveries of natural resources. In a thought experiment whereby economies in Latin America and sub-Saharan Africa remained closed, they would have only achieved one quarter of the actual increase in discoveries they have experienced since the early 1990s. The results call into question the commonly held view that natural resource endowments are exogenous.

Keywords: Global Environment, Coastal and Marine Resources, Energy and Natural Resources, Mining & Extractive Industry (Non-Energy), International Trade and Trade Rules

Suggested Citation

Arezki, Rabah and van der Ploeg, Frederick and Toscani, Frederik, The Shifting Natural Wealth of Nations: The Role of Market Orientation (July 11, 2018). World Bank Policy Research Working Paper No. 8520. Available at SSRN: https://ssrn.com/abstract=3238360

Rabah Arezki (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Frederick Van der Ploeg

University of Oxford ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

Frederik Toscani

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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