Can Abundant Natural Resources Propel Sustainable Economic Growth? An Empirical Analysis of the Albanian Case

This study investigates the paradox of resource abundance, whereby countries with significant natural resource endowments frequently exhibit slower economic growth and lower standards of living than resource-scarce nations. Using Solow growth model decomposition and nonlinear regression analysis on Albanian economic data (2009-2024), we examine whether natural resource extraction has contributed to sustainable economic growth. Our findings indicate that natural resources have exerted a negative net effect of -2.51% on total factor productivity, suggesting that Albania may be vulnerable to resource curse mechanisms. Despite mineral and hydrocarbon revenues comprising 4-7% of GDP annually, these sectors demonstrate minimal contribution to technological advancement and productivity growth. We conclude that sustainable development requires fundamental policy restructuring toward value-added processing, technological innovation, and diversified economic development rather than primary resource export dependence. Received: 23 November 2025 / Accepted: 27 December 2025 / Published: January 2026