Revisiting the Natural Resource ‘Curse’ in the Context of Trade in Value Added: Enclave or High-Development Backward Linkages?

52 Pages Posted: 15 Aug 2019

See all articles by Filippo Bontadini

Filippo Bontadini

University of Sussex - Science Policy Research Unit (SPRU)

Maria Savona

University of Sussex

Date Written: August 1, 2019

Abstract

his paper puts forward and empirically tests the conjecture that specialisation in Natural Resource Industries (NRI) might not necessarily be a ‘curse’ for (developing) countries, if it provides opportunities for export diversification in backward linked sectors à la Hirschman. We first revisit the evolution of the debate around the NRI ‘curse’, including those from scholars sceptical of diversification based on beneficiation from NRI. We then empirically test whether NRI might represent a sufficient “domestic representative demand” à la Linder for backward linked sectors such as Knowledge Intensive Business Services (KIBS) or high tech manufacturing that might provide new opportunities for export diversification led by virtuous pathways of domestic structural change. We find empirical support for this conjecture and discuss some implications that revisit the NRI curse debate.

Keywords: Natural Resource Curse, Backward Linkages, Trade, Value Added, Input-Output

JEL Classification: F14, F63, N50

Suggested Citation

Bontadini, Filippo and Savona, Maria, Revisiting the Natural Resource ‘Curse’ in the Context of Trade in Value Added: Enclave or High-Development Backward Linkages? (August 1, 2019). SWPS 2019-15. Available at SSRN: https://ssrn.com/abstract=3436693 or http://dx.doi.org/10.2139/ssrn.3436693

Filippo Bontadini (Contact Author)

University of Sussex - Science Policy Research Unit (SPRU) ( email )

Brighton, BN1 9SL
United Kingdom

Maria Savona

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

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