Cavalcanti, T. V. D., Da Mata, D. and Toscani, F.
Winning the Oil Lottery: The Impact of Natural Resource Extraction on Growth
CWPE1455
Abstract: This paper provides evidence on the causal impact of oil discoveries on local development. Novel data
on the drilling of 20,000 oil wells in Brazil allows us to exploit a quasi-experiment: municipalities where
oil was discovered constitute the treatment group while municipalities with drilling but no discovery
are the control group. The results show that oil discoveries significantly increase per capita GDP and
urbanization. We find positive spillovers to non-oil sectors, specifically an increase in services GDP
which stems from higher labor productivity. The results are consistent with greater local demand for
non-tradable services driven by highly paid oil workers.
Keywords: Petroleum Industry, Economic Growth, Urbanization
JEL Codes: O13 O40
Author links: Tiago Cavalcanti
PDF: https://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1455.pdf 
Open Access Link: https://doi.org/10.17863/CAM.5671
Keynes Fund Project(s):
Oil, Growth and Misallocation: Evidence from a Quasi-Experiment and Establishments Level Data (JHLO)
Published Version of Paper: Winning The Oil Lottery: The Impact of Natural Resource Extraction on Growth, Cavalcanti, T., Da Mata, D. and, Toscani, F., Journal of Economic Growth (2019)
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