Increased market orientation causes a significant increase in discoveries of natural resources

The shifting natural wealth of nations: The role of market orientation. Rabah Arezki, Frederick van der Ploeg, Frederik Toscani. Journal of Development Economics, https://doi.org/10.1016/j.jdeveco.2018.12.002

Highlights
•    We explore the effect of market orientation on (known or available) natural resource wealth.
•    A novel dataset combines world-wide major hydrocarbon and mineral discoveries.
•    Empirical estimates show that increased market orientation causes a significant increase in discoveries of natural resources.
•    We call into question the commonly held view that known or available natural resource endowments are exogenous.

Abstract: This paper explores the effect of market orientation on (known or available) natural resource wealth using a novel dataset of world-wide major hydrocarbon and mineral discoveries. Our 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 where economies in Latin America and sub-Saharan Africa remain closed, they would have only achieved one quarter of the actual increase in discoveries they have experienced since the early 1990s. Our results call into question the commonly held view that known or available natural resource endowments are exogenous.