THE IMPACT OF OIL RENT, CURRENCY OVERVALUATION, AND INSTITUTION QUALITY, ON ECONOMIC GROWTH OF OIL-RICH COUNTRIES: A HETEROGENEOUS PANEL DATA STUDY

This paper investigates several key challenges faced by oil-rich countries regarding their economic growth and development. First, it discusses how to determine currency overvaluation for these (if any). To the overvaluation, real exchange rate (RER) is calculated Balassa–Samuelson effect estimated via a regression model. Next, study presents an empirical model assessing impact of oil rent on in context institutional quality every country. As dynamic model, both endogeneity heterogeneity are expected across cross-sections because different culture, customs, political institutions. Consequently, heterogeneous panel data analysis undertaken using error correction cointegration technique mean group estimation method autoregressive distributed lag Finally, concludes findings provides policy recommendations offering new perspective ongoing dilemma, discussing limitations facing developing path success may differ from other countries. Keywords : Natural resources; Rent-Seeking; Institutions; Economic Growth; Energy JEL Classifications D72; E02; F43; O47; Q43 DOI: https://doi.org/10.32479/ijeep.10971