Bachelor Thesis: The relationship between natural resource rents and diversification

This paper examines the correlation between the amount of natural resource rents and the diversification of a country's economy. The study uses a fixed effects model and measures diversification through the Herfindahl-Hirschman index, with GDP and GDP per capita as economic indicators. Data from 1995 to 2015 from 135 developing countries and 36 developed countries showed a statistically significant negative relationship between natural resource rents and diversification in both developing and developed countries. The results also indicate a negative correlation between GDP and diversification in developing countries.