The Threshold Effect of Economic Complexity on Natural Resource Dependency in MENA Countries

The main purpose of this research is to answer whether increasing economic complexity is a suitable solution to reduce dependence on natural resources in MENA countries. In this regard, using information and statistical data of 11 countries of this region from 2000 to 2022, the threshold impact of economic complexity on natural resource dependency has been investigated at the total and disaggregated levels. The results confirm the threshold impact of economic complexity on the total natural resources rent, oil rent, natural gas rent, and forest rent and its insignificant effect on mineral rent. Based on the calculated threshold level, the impact of economic complexity on the total natural resources rent and oil rent is negative, and the impact of economic complexity on natural gas rent and forest rent is inverted U-shaped and U-shaped, respectively. The average marginal impact of economic complexity on the total natural resources rent, oil rent, natural gas rent, and forest rent is estimated to be about -19.09, -17.88, -1.09, and 0.01, respectively. Based on this, it can be said that economic complexity reduces dependence on energy sources in the studied countries.