Investigating the Effect of Natural Resource Rent and Trade on the Added Value of the Agricultural Sector in Selected OPEC Member Countries
Document Type : Research Paper
Authors
1 PhD in Agricultural Economics, Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari University of Agricultural Sciences and Natural Resources, Sari, Iran
2 Assistant professor of Agricultural Economics, Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari University of Agricultural Sciences and Natural Resources, Sari, Iran.
3 Msc. Student of Agricultural Economics, Department of Agricultural Economics, Faculty of Agricultural Engineering, Sari University of Agricultural Sciences and Natural Resources, Sari, Iran.
4 Associate professor, Agricultural economics, Sari University of Agricultural Sciences and Natural Resources
Abstract
The resource curse is one of these explanations related to the mainstream of international trade economics, which states that windfall revenues from natural resources negatively impact other sectors. This is done by the collapse of the manufacturing sector due to the increase in the value of the domestic currency and the diversion of production resources from other sectors of the economy to the natural resource sector in search of natural resources. This study examines the relationship between natural resource rents in selected OPEC member countries and the agricultural sector’s value-added. For this purpose, consolidated data from selected OPEC member countries for the period 2000–2020 and the fixed effects method were used. The estimation was performed once for selected OPEC member countries and once using a dummy variable for Iran. The results obtained from the estimation of the model with fixed effects for selected OPEC member countries showed that the variables of carbon dioxide emissions and natural resource rents have a significant and negative effect on the growth of value-added in the agricultural sector. Meanwhile, the estimation of the results of the dummy variable fixed effects model for Iran showed that the dummy variables of carbon dioxide emissions and natural resource rents do not affect the value-added in the agricultural sector. According to the obtained results, it can be said that the natural resource curse hypothesis is confirmed in selected OPEC member countries; however, in Iran, due to oil and financial sanctions in the past years, this variable is not significant, and this hypothesis is not confirmed in Iran. Accordingly, policymakers should consider the difference in the impact of the agricultural sector's value-added from natural resource rents and carbon dioxide emissions in the policies implemented.
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