The natural resources rents: is economic complexity a solution for resource curse?

Abstract

This study examines the influences of economic complexity on natural resources rents. A global sample of 90 economies decomposed into three subsamples including 27 Low and Lower-Middle Income Economies (LMEs), 22 Upper-Middle Income Economies (UMEs), and 41 High Income Economies (HIEs) are investigated over the period 2002–2017. Our analysis deals with the total natural resources rents (coal rents, mineral rents, natural gas rents, and forest rents) while our control variables refers to economic growth, FDI inflows, capital investment, government consumption, and demographic factor. Our empirical results show that the economic complexity has a light impact on total natural rents; these effects are documented with statistically significant evidence in LMEs and HIEs, while it is not in UMEs. Furthermore, the economic complexity appears to have reduced impacts on mineral rents, natural gas rents, but it likely increases coal rents. Finally, our study used two measures of the economic complexity (ECI, ECI+) which provided different results highlighting the methodological difference in the methods of measurement of these indices and calling for a more systematic measure of economic complexity.