How Are Innovation, Growth, and HCIF Affected by Natural Resources?

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Author(s): Seyed Mohammad Amir Mousavi (National Iranian Oil Refining and Distribution Company, Iran & Université Côte d'Azur, France)
Copyright: 2019
Pages: 34
Source title: Global Perspectives on Human Capital-Intensive Firms
Source Author(s)/Editor(s): Cécile Cézanne (Université Côte d'Azur, France)and Laurence Saglietto (Université Côte d’Azur, France)
DOI: 10.4018/978-1-5225-7426-2.ch006

Keywords: Business & Management / Business and Organizational Research / Business Science Reference / Human Aspects of Business

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Abstract

This chapter demystifies in detail the transmission mechanisms of how the natural resource industry (NRI) harms the growth and innovation in human capital-intensive firms (HCIF). Two important phenomena were studied qualitatively: rent seeking (RS) and Dutch disease (DD) which result from the abundance of natural resources (NR). RS pushes down the return of production and DD results in uncompetitive production. The empirical results for a cross-section of 81 countries show a significant evidence that with recent data, oil rent hinders human capital as a proxy for innovation. Meanwhile, the indicators of resource governance show a significant and positive impact on human capital accumulation. A growing amount of literature focuses on growth and human capital, while this chapter emphasizes HCIF and innovation, elaborating the transmission mechanisms of underperforming economic growth through the hindrance of innovation in the firms and awkwardness of HC.

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