The Nonlinear Relationship Between Entrepreneurship and Natural Resource Rents

To examine a nonlinear relationship between entrepreneurship density and natural resource rents, this study applies the panel-corrected standard errors (PCSE) estimator to a sample of 87 countries over the period of 2006-2016. Estimation results show strong evidence of the nonlinear relationship between the two variables. The influence of entrepreneurship density on natural resource rents is subject to two different regimes. In low- and upper-middle-income countries, an increase in entrepreneurship density increases natural resource rents to a certain level, but it reduces the rents afterwards. In high-income countries, the relationship is reversed. Policymakers should adapt their entrepreneurship policy to prevailing economic circumstances to enhance economic sustainability.