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- Title
Crowding-Out Effect of Natural Resources on Domestic Investment: The Importance of Information Communication and Technology (ICT) and Control of Corruption in the Middle East and Central Asia.
- Authors
Abbas, Shujaat; Rehman, Faheem Ur; Khan, Shabeer; Rehman, Mohd Ziaur; Alonazi, Wadi B.; Noman, Abul Ala
- Abstract
Countries of the Middle East and Central Asia depend heavily on natural resources for their exports, income, and employment. This study is a preliminary investigation that explores the effect of natural resources on domestic investment in a sample of 12 highly resource-dependent countries in the Middle East and Central Asia from 2000 to 2019. The recently advanced cross-sectional dependent auto-regressive distributed lag (CS-ARDL) model and panel quantile regression are employed. The results validate the accelerator theory that an increase of the non-oil GDP growth rate has a robust positive impact on domestic investment, while natural resources crowd-out domestic investment. The long-run estimate of ICT reveals a significant positive impact, while corruption shows a significant negative effect. These findings urge sample resource-dependent countries to focus on developing ICT-based enterprises and control prevailing corruption levels. Moreover, adopting liberal trade policies can also enhance domestic investment opportunities.
- Subjects
MIDDLE East; CENTRAL Asia; NATURAL resources; INFORMATION &; communication technologies; INVESTMENT information; DATA corruption; QUANTILE regression; CORRUPTION; ALPINE glaciers
- Publication
Sustainability (2071-1050), 2022, Vol 14, Issue 20, pN.PAG
- ISSN
2071-1050
- Publication type
Article
- DOI
10.3390/su142013392