The Role of Economic Structure in Shaping Growth in the Kurdistan Region of Iraq: A Quantitative and Structural Analysis

Abstract

This study investigates the role of economic structure in shaping economic growth in the Kurdistan Region of Iraq (KRI), with a particular focus on sectoral composition and human capital. Drawing on a quantitative research design and secondary data sources, the study analyzes the contributions of key sectors oil, services, industry, and agriculture to Gross Domestic Product (GDP) growth. A multiple regression model is employed to assess the relationship between economic structure and growth, incorporating human capital as a critical explanatory variable. The findings reveal that the KRI economy remains heavily dependent on the oil sector, which, despite its substantial contribution to GDP, has a statistically significant negative impact on economic growth. This supports the resource curse hypothesis, suggesting that overreliance on natural resources can hinder sustainable development. In contrast, the service and industrial sectors exhibit strong positive and statistically significant relationships with GDP growth, indicating that diversification into these sectors enhances economic performance and resilience. The agricultural sector, although positively associated with growth, does not demonstrate statistical significance, reflecting its limited current role in the regional economy. Human capital emerges as the most influential factor, with a strong positive effect on economic growth. This highlights the importance of education, skills development, and workforce quality in supporting structural transformation and long-term economic sustainability.