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Natural resources extraction and geopolitical risk: Examining oil resources extraction in China

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  • Chen, Zhiguo
  • Gao, Wei
  • Zafar, Quratulain
  • Dördüncü, Hazar

Abstract

This study examines the disaggregated impact of natural resource rents, including natural gas, forest, and oil rents, on China's economic performance. Additionally, we investigate the interactive relationship between geopolitical risk and research and development expenditure. Our econometric analyses, including unit root tests, cointegration analysis using the Bayer-Hanck model, and robustness tests, suggest that oil rents negatively impact China's economic performance, while forest and natural gas rents enhance it. Moreover, we observe that geopolitical risk negatively influences economic performance, while research and development expenditure has a positive effect. Increasing research and development, spending can promote efficient resource utilization and support China's economic growth. Our study's robustness and validity were confirmed through various tests, and we recommend that policymakers and scholars take measures to minimize geopolitical risk while evaluating the relationship between resource rents and economic performance. Overall, our research provides valuable insights into the challenges associated with natural resources and their impact on economic development, contributing to ongoing efforts to promote sustainable economic growth in China.

Suggested Citation

  • Chen, Zhiguo & Gao, Wei & Zafar, Quratulain & Dördüncü, Hazar, 2023. "Natural resources extraction and geopolitical risk: Examining oil resources extraction in China," Resources Policy, Elsevier, vol. 85(PA).
    • Handle: RePEc:eee:jrpoli:v:85:y:2023:i:pa:s0301420723005226
    DOI: 10.1016/j.resourpol.2023.103811
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