IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v85y2023ipbs0301420723005111.html
   My bibliography  Save this article

Geopolitical risk and economic security: Exploring natural resources extraction from BRICS region

Author

Listed:
  • Cao, Lansheng
  • Gu, Ming
  • Jin, Ding
  • Wang, Changyan

Abstract

In the economic security and development race, industrialized and emerging economies target different economic and non-economic instruments to achieve higher economic growth and sustainable performance. Emerging economies are paying more attention to the extraction/utilization of natural resources to boost their economic growth. Therefore, the present study evaluates the influence of natural resources, geopolitical risk, and financial development on the economic growth of BRICS economies during 1991–2022. The panel cointegration tests asserted that the study variables are cointegrated in the long run. Using parametric and non-parametric approaches, the empirical results revealed that geopolitical risk and financial development are significant economic security factors boosting regional income. On the other hand, natural resources asymmetrically affect economic growth, where natural gas rents positively, while oil rents adversely affect economic growth. The robustness of the results is tested via augmented mean group and quantile regression approaches. Besides, there exists a two-way causal association between the variables. This study suggests the efficient extraction and use of natural resources, further reduction of the geopolitical risk, and improvement in the financial sector to attain sustainable development and secure economic growth.

Suggested Citation

  • Cao, Lansheng & Gu, Ming & Jin, Ding & Wang, Changyan, 2023. "Geopolitical risk and economic security: Exploring natural resources extraction from BRICS region," Resources Policy, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:jrpoli:v:85:y:2023:i:pb:s0301420723005111
    DOI: 10.1016/j.resourpol.2023.103800
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723005111
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.103800?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dario Caldara & Matteo Iacoviello, 2022. "Measuring Geopolitical Risk," American Economic Review, American Economic Association, vol. 112(4), pages 1194-1225, April.
    2. Lingui Qin & Syed Raheem & Muntasir Murshed & Xu Miao & Zeeshan Khan & Dervis Kirikkaleli, 2021. "Does financial inclusion limit carbon dioxide emissions? Analyzing the role of globalization and renewable electricity output," Sustainable Development, John Wiley & Sons, Ltd., vol. 29(6), pages 1138-1154, November.
    3. Cheng, Chih-Yang & Chien, Mei-Se & Lee, Chien-Chiang, 2021. "ICT diffusion, financial development, and economic growth: An international cross-country analysis," Economic Modelling, Elsevier, vol. 94(C), pages 662-671.
    4. Sharma, Chandan & Paramati, Sudharshan Reddy, 2022. "Resource curse versus resource blessing: New evidence from resource capital data," Energy Economics, Elsevier, vol. 115(C).
    5. repec:bba:eallet:v:1:y:2022:i:1:p:1-7 is not listed on IDEAS
    6. repec:bba:eallet:v:1:y:2022:i:2:p:28-34 is not listed on IDEAS
    7. Razzaq, Asif & Sharif, Arshian & Ozturk, Ilhan & Afshan, Sahar, 2023. "Dynamic and threshold effects of energy transition and environmental governance on green growth in COP26 framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 179(C).
    8. Zhang, Ziwei & Zhang, Chao, 2023. "Revisiting the importance of forest rents, oil rents, green growth in economic performance of China: Employing time series methods," Resources Policy, Elsevier, vol. 80(C).
    9. Fu, Rong & Liu, Jianmei, 2023. "Revenue sources of natural resources rents and its impact on sustainable development: Evidence from global data," Resources Policy, Elsevier, vol. 80(C).
    10. Dumitrescu, Elena-Ivona & Hurlin, Christophe, 2012. "Testing for Granger non-causality in heterogeneous panels," Economic Modelling, Elsevier, vol. 29(4), pages 1450-1460.
    11. Okoye, Lawrence Uchenna & Adeleye, Bosede Ngozi & Okoro, Emmanuel E. & Okoh, Johnson I. & Ezu, Gideon K. & Anyanwu, Felicia A., 2022. "Effect of gas flaring, oil rent and fossil fuel on economic performance: The case of Nigeria," Resources Policy, Elsevier, vol. 77(C).
    12. Hao Chen & Duncan O. Hongo & Max William Ssali & Maurice Simiyu Nyaranga & Consolata Wairimu Nderitu, 2020. "The Asymmetric Influence of Financial Development on Economic Growth in Kenya: Evidence From NARDL," SAGE Open, , vol. 10(1), pages 21582440198, February.
    13. Sangkyun Park, 2022. "Do Bank Capital Requirements Make Resource Allocation Suboptimal?," Journal of Economic Analysis, Anser Press, vol. 1(2), pages 35-49, December.
    14. Muhammad Shahbaz & Muhammad A. Nasir & Amine Lahiani, 2022. "Role of financial development in economic growth in the light of asymmetric effects and financial efficiency," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 361-383, January.
    15. Gu, Xiao & Shen, Xi & Zhong, Xiangming & Wu, Tong & Rahim, Syed, 2023. "Natural resources and undesired productions of environmental outputs as green growth: EKC in the perspective of green finance and green growth in the G7 region," Resources Policy, Elsevier, vol. 82(C).
    16. Tang, Chang & Irfan, Muhammad & Razzaq, Asif & Dagar, Vishal, 2022. "Natural resources and financial development: Role of business regulations in testing the resource-curse hypothesis in ASEAN countries," Resources Policy, Elsevier, vol. 76(C).
    17. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    18. Kais Mtar & Walid Belazreg, 2023. "On the nexus of innovation, trade openness, financial development and economic growth in European countries: New perspective from a GMM panel VAR approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 766-791, January.
    19. Syed Abdul Rehman Khan & Arshian Sharif & Hêriş Golpîra & Anil Kumar, 2019. "A green ideology in Asian emerging economies: From environmental policy and sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 27(6), pages 1063-1075, November.
    20. Onyinye I. Anthony-Orji & Anthony Orji & Jonathan E. Ogbuabor & Lucy C. Uka, 2023. "Money matters a lot: empirical analysis of financial development, financial inclusion and economic growth in Nigeria," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 17(1), pages 100-117.
    21. repec:bla:obuest:v:61:y:1999:i:0:p:631-52 is not listed on IDEAS
    22. Razzaq, Asif & Wang, Shizhen & Adebayo, Tomiwa Sunday & Saleh Al-Faryan, Mamdouh Abdulaziz, 2022. "The potency of natural resources on ecological sustainability in PIIGS economies," Resources Policy, Elsevier, vol. 79(C).
    23. Siyu Ren & Zhiyuan Liu & Zhiyuan Liu & Mingyue Du, 2022. "Does the internet development put pressure on energy-saving potential for environmental sustainability? Evidence from China," Journal of Economic Analysis, Anser Press, vol. 1(1), pages 50-65, September.
    24. repec:bba:eallet:v:1:y:2022:i:2:p:15-22 is not listed on IDEAS
    25. Razzaq, Asif & Sharif, Arshian & Ozturk, Ilhan & Skare, Marinko, 2022. "Inclusive infrastructure development, green innovation, and sustainable resource management: Evidence from China’s trade-adjusted material footprints," Resources Policy, Elsevier, vol. 79(C).
    26. Pamela Efua Ofori & Daryna Grechyna & Muhammad Shafiullah, 2021. "Remittances, natural resource rent and economic growth in Sub-Saharan Africa," Cogent Economics & Finance, Taylor & Francis Journals, vol. 9(1), pages 1979305-197, January.
    27. Dogan, Eyup & Majeed, Muhammad Tariq & Luni, Tania, 2021. "Analyzing the impacts of geopolitical risk and economic uncertainty on natural resources rents," Resources Policy, Elsevier, vol. 72(C).
    28. Su, Chi-Wei & Khan, Khalid & Umar, Muhammad & Zhang, Weike, 2021. "Does renewable energy redefine geopolitical risks?," Energy Policy, Elsevier, vol. 158(C).
    29. Barış Soybilgen & Huseyin Kaya & Dincer Dedeoglu, 2019. "Evaluating the effect of geopolitical risks on the growth rates of emerging countries," Economics Bulletin, AccessEcon, vol. 39(1), pages 717-725.
    30. Xie, Mingting & Irfan, Muhammad & Razzaq, Asif & Dagar, Vishal, 2022. "Forest and mineral volatility and economic performance: Evidence from frequency domain causality approach for global data," Resources Policy, Elsevier, vol. 76(C).
    31. Korkmaz, Özge, 2022. "Do oil, coal, and natural gas consumption and rents impact economic growth? An empirical analysis of the Russian Federation," Resources Policy, Elsevier, vol. 77(C).
    32. repec:bba:eallet:v:1:y:2022:i:1:p:28-33 is not listed on IDEAS
    33. Biplab Kumar Guru & Inder Sekhar Yadav, 2019. "Financial development and economic growth: panel evidence from BRICS," Journal of Economics, Finance and Administrative Science, Emerald Group Publishing Limited, vol. 24(47), pages 113-126, February.
    34. Elena Vladimirovna Travkina & Alim Borisovich Fiapshev & Marianna Tolevna Belova & Svetlana Evgenievna Dubova, 2023. "Culture and Institutional Changes and Their Impact on Economic and Financial Development Trajectories," Economies, MDPI, vol. 11(1), pages 1-13, January.
    35. Yu, Yiling, 2023. "Role of Natural resources rent on economic growth: Fresh empirical insight from selected developing economies," Resources Policy, Elsevier, vol. 81(C).
    36. Heo, Jai Chul & Yeon, Wonho & Kim, Sangbae & Kim, Younkyoo & Kim, Heungkyu & PAK, Seong Bin & Lee, Seungjoo & LEE, Jungoo & Lee, Wang Hwi, 2022. "미중 전략경쟁 시대 지정학적 리스크와 경제안보(Geopolitical Risk in the Era of U.S.-China Strategic Competition and Economic Security)," Policy Analyses 22-1, Korea Institute for International Economic Policy.
    37. Hordofa, Tolassa Temesgen & Liying, Song & Mughal, Nafeesa & Arif, Asma & Minh Vu, Hieu & Kaur, Prabjot, 2022. "Natural resources rents and economic performance: Post-COVID-19 era for G7 countries," Resources Policy, Elsevier, vol. 75(C).
    38. Nasiru Inuwa & Sagir Adamu & Mohammed Bello Sani & Haruna Usman Modibbo, 2022. "Natural resource and economic growth nexus in Nigeria: a disaggregated approach," Letters in Spatial and Resource Sciences, Springer, vol. 15(1), pages 17-37, April.
    39. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    40. Wang, Kai-Hua & Su, Chi-Wei & Umar, Muhammad, 2021. "Geopolitical risk and crude oil security: A Chinese perspective," Energy, Elsevier, vol. 219(C).
    41. Huang, Shi-Zheng, 2022. "The effect of natural resources and economic factors on energy transition: New evidence from China," Resources Policy, Elsevier, vol. 76(C).
    42. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    43. Heo, Jaichul, 2022. "Geopolitical Risk in the Era of U.S.-China Strategic Competition and Economic Security," World Economy Brief 22-35, Korea Institute for International Economic Policy.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hu, Zinan & Borjigin, Sumuya, 2024. "The amplifying role of geopolitical Risks, economic policy Uncertainty, and climate risks on Energy-Stock market volatility spillover across economic cycles," The North American Journal of Economics and Finance, Elsevier, vol. 71(C).
    2. Phan, Thuy Chung, 2023. "Energy prices volatility, natural resource policy-making and green economic recovery in post COVID-19 era: Evidence from BRICS countries," Resources Policy, Elsevier, vol. 87(PA).
    3. Zheng, Chengting & Wu, Shufang & Teng, Yin-Pei & Wu, Shuzhao & Wang, Zhe, 2023. "Natural resources, tourism resources and economic growth: A new direction to natural resources perspective and investment," Resources Policy, Elsevier, vol. 86(PB).
    4. Opoku-Mensah, Evans & Chun, Weide & Wu, Yuan & Zhang, Can & Ofori, Elvis Kwame & Chen, Wei, 2024. "Sectoral innovativeness and environmental sustainability: Unearthing solutions to the resource curse," Technology in Society, Elsevier, vol. 76(C).
    5. Zhang, Bin & Liu, Zuyao & Wang, Zhaohua & Zhang, Shuang, 2023. "The impact of geopolitical risk on energy security: Evidence from a GMM panel VAR approach," Resources Policy, Elsevier, vol. 86(PB).
    6. Jiang, Wei & Zhang, Yanyu & Wang, Kai-Hua, 2024. "Analyzing the connectedness among geopolitical risk, traditional energy and carbon markets," Energy, Elsevier, vol. 298(C).
    7. Vivoda, Vlado & Matthews, Ron & McGregor, Neil, 2024. "A critical minerals perspective on the emergence of geopolitical trade blocs," Resources Policy, Elsevier, vol. 89(C).
    8. Zheng, Ye & Gong, Bing, 2024. "Nexus between natural resources and digital economy: The role of geopolitical risk," Resources Policy, Elsevier, vol. 89(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Fei & Liu, Xiaoyan, 2023. "Resources extraction and geopolitical risk: A novel perspective of World's biggest economies," Resources Policy, Elsevier, vol. 85(PA).
    2. Huang, Lilong & Dong, Dongdong & Dong, Xueqin, 2023. "Natural resources extraction, financial expansion and remittances: South Asian economies perspective of sustainable development," Resources Policy, Elsevier, vol. 84(C).
    3. Chen, Liang & Guo, Yirong, 2023. "The drivers of sustainable development: Natural resources extraction and education for low-middle- and high-income countries," Resources Policy, Elsevier, vol. 86(PB).
    4. Tang, Ziran & Liu, Yuqing & Zhang, Leilei & Gu, Huimin & Liao, Yuxuan, 2023. "Natural resources, cleaner electricity production and economic performance," Resources Policy, Elsevier, vol. 86(PB).
    5. Zhang, Shaohui & Chen, Kenjie, 2023. "Green finance and ecological footprints: Natural resources perspective of China’s growing economy," Resources Policy, Elsevier, vol. 85(PB).
    6. Zhang, Bo & Zhao, Meiyu & Tu, Yongqian, 2023. "Sustainable development and resources extraction: A novel perspective for resources rich economies," Resources Policy, Elsevier, vol. 83(C).
    7. Wang, Zhongbao & Razzaq, Asif, 2022. "Natural resources, energy efficiency transition and sustainable development: Evidence from BRICS economies," Resources Policy, Elsevier, vol. 79(C).
    8. Chen, Ming & Chen, Junying, 2023. "Natural resources extraction in emerging economies: Does it promote sustainable development or crowd-out real sector?," Resources Policy, Elsevier, vol. 83(C).
    9. Li, Menghan & Zaidan, Amal Mousa & Ageli, Mohammed Moosa & Wahab, Salman & Khan, Zeeshan, 2023. "Natural resources, environmental policies and renewable energy resources for production-based emissions: OECD economies evidence," Resources Policy, Elsevier, vol. 86(PA).
    10. Chi, Mingyuan & Ping, Wang, 2024. "Resources abundant economies and sustainability of economic growth: A novel panel evidence of high resources economies," Resources Policy, Elsevier, vol. 88(C).
    11. Fang, Shuya & Fang, Wei, 2023. "How fiscal decentralization and trade diversification influence sustainable development: Moderating role of resources dependency," Resources Policy, Elsevier, vol. 84(C).
    12. Gao, Chunjiao & Chen, Hongxi, 2023. "Electricity from renewable energy resources: Sustainable energy transition and emissions for developed economies," Utilities Policy, Elsevier, vol. 82(C).
    13. Wang, Zihan & Chen, Xi & Ullah, Sami & Abbas, Shujaat, 2023. "Resource curse or blessing? Evaluating the role of natural resource, social globalization, and environmental sustainability in China," Resources Policy, Elsevier, vol. 85(PA).
    14. Ma, Qiang & Li, Sa & Aslam, Misbah & Ali, Naveed & Alamri, Ahmad Mohammed, 2023. "Extraction of natural resources and sustainable renewable energy: COP26 target in the context of financial inclusion," Resources Policy, Elsevier, vol. 82(C).
    15. Khan, Zeeshan & Hossain, Mohammad Razib & Badeeb, Ramez Abubakr & Zhang, Changyong, 2023. "Aggregate and disaggregate impact of natural resources on economic performance: Role of green growth and human capital," Resources Policy, Elsevier, vol. 80(C).
    16. Zhang, Qianxiao & Shah, Syed Ale Raza & Yang, Ling, 2022. "An Appreciated Response of Disaggregated Energies Consumption towards the Sustainable Growth: A debate on G-10 Economies," Energy, Elsevier, vol. 254(PA).
    17. She, Weijun & Mabrouk, Fatma, 2023. "Impact of natural resources and globalization on green economic recovery: Role of FDI and green innovations in BRICS economies," Resources Policy, Elsevier, vol. 82(C).
    18. Xie, Bofeng & Rehman, Mubeen Abdur & Zhang, Junyan & Yang, Runze, 2022. "Does the financialization of natural resources lead toward sustainability? An application of advance panel Granger non-causality," Resources Policy, Elsevier, vol. 79(C).
    19. Wang, Guoyu & Gu, Xiao & Shen, Xi & Uktamov, Khusniddin Fakhriddinovich & Ageli, Mohammed Moosa, 2023. "A dual risk perspective of China's resources market: Geopolitical risk and political risk," Resources Policy, Elsevier, vol. 82(C).
    20. Zhang, Ziwei & Zhang, Chao, 2023. "Revisiting the importance of forest rents, oil rents, green growth in economic performance of China: Employing time series methods," Resources Policy, Elsevier, vol. 80(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:85:y:2023:i:pb:s0301420723005111. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.