Geographic oil concentration and economic growth – a panel data analysis

Given a panel of oil producing countries, we show that a higher oil concentration is associated with an increase in economic growth through capital efficiency in: (i) countries with medium and low income per head from East Asia & Pacific and Latin America & the Caribbean, classified as followers in terms of technology-convergence clubs; (ii) countries with high income inequality. In our view, the overall results reflect the broader scope for factor efficiency increases in less developed countries arising from the oil industry, which is characterised by a highly globalised know-how.