The resource curse hypothesis reveals that natural resource abundance may harm the finance-growth nexus. Some argue that this negative effect depends on the level of resource dependence. If the oil revenues remain under a certain threshold, it will not harm the finance-growth nexus. This paper aims to determine this threshold level of oil rent in Iran. Using time-series data from 1970 to 2017 and the Threshold Autoregressive models (TAR), we find that, where the oil rent is lower than 20%, financial development has a statistically significant positive effect on economic growth. But the impact of financial development on economic growth is significantly reduced for the situation where oil rent is higher than 20 percent of GDP. The empirical results suggest that oil rent encumber economic growth in Iran through the financial development channel
