IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v86y2023ipas0301420723010048.html
   My bibliography  Save this article

Reassessing the linkage between natural resources and economic growth in China: Delving into the impacts of national resource taxes, renewable energy, financial advancements, and provincial fiscal expenditures

Author

Listed:
  • Xu, Xiaofang
  • Yu, Wanqing
  • Zhao, Xingju
  • Xu, Wei

Abstract

While there has been extensive research on the relationship between natural resources and the economy, the indirect impacts of natural resources on economic growth remain underexplored. This study, spanning from 1995 to 2017, delves into the link between natural resources and economic growth across China's provincial economies. The research incorporates controllable variables such as financial development, renewable energy, technological innovation, and provincial fiscal expenditures. A variety of panel methodologies were employed, with the innovative MMQR serving as the primary technique. Additionally, the CIPS and Westerlund tests were utilized for unit root and cointegration assessments. To ensure the robustness of the findings, the study also incorporated Granger causality, Bootstrap quantile regression, and causal observations. The results demonstrate that long-term cointegration has been found and that the data are stable at Difference D(1). National resource taxes have a favorable effect on economic growth across all quantiles, according to the MMQR findings. Renewable energy and financial growth also boost all quantiles of the province's economy. Furthermore, the economic expansion brought on by renewable energy occurs in the lower quantiles while it declines in the upper quantiles, indicating that the investment or transition will slow down over the next few years. Furthermore, outcomes from robustness check analysis are similar, trustworthy, and true. The causal connection shows that whereas national resource tax, technological innovation, renewable energy, and financial development have a bidirectional causal relationship between components, public fiscal expenditures have a unidirectional causal relationship with economic growth. Since the study is linked to the provincial government rather than the federal government, the policies are mostly concentrated at the provincial level.

Suggested Citation

  • Xu, Xiaofang & Yu, Wanqing & Zhao, Xingju & Xu, Wei, 2023. "Reassessing the linkage between natural resources and economic growth in China: Delving into the impacts of national resource taxes, renewable energy, financial advancements, and provincial fiscal exp," Resources Policy, Elsevier, vol. 86(PA).
    • Handle: RePEc:eee:jrpoli:v:86:y:2023:i:pa:s0301420723010048
    DOI: 10.1016/j.resourpol.2023.104293
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723010048
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.104293?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. Usman, Muhammad & Jahanger, Atif & Makhdum, Muhammad Sohail Amjad & Balsalobre-Lorente, Daniel & Bashir, Adnan, 2022. "How do financial development, energy consumption, natural resources, and globalization affect Arctic countries' economic growth and environmental quality? An advanced panel data simulation," Energy, Elsevier, vol. 241(C).
    2. He, Jiao & Deng, Zhenghua, 2023. "Revisiting natural resources rents and sustainable financial development: Evaluating the role of mineral and forest for global data," Resources Policy, Elsevier, vol. 80(C).
    3. Gao, Xue & Zhang, Yi, 2022. "What is behind the globalization of technology? Exploring the interplay of multi-level drivers of international patent extension in the solar photovoltaic industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 163(C).
    4. Khan, Zeeshan & Badeeb, Ramez Abubakr & Nawaz, Kishwar, 2022. "Natural resources and economic performance: Evaluating the role of political risk and renewable energy consumption," Resources Policy, Elsevier, vol. 78(C).
    5. Ma, Qiang & Mentel, Grzegorz & Zhao, Xin & Salahodjaev, Raufhon & Kuldasheva, Zebo, 2022. "Natural resources tax volatility and economic performance: Evaluating the role of digital economy," Resources Policy, Elsevier, vol. 75(C).
    6. Mirza, Nawazish & Umar, Muhammad & Afzal, Ayesha & Firdousi, Saba Fazal, 2023. "The role of fintech in promoting green finance, and profitability: Evidence from the banking sector in the euro zone," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 33-40.
    7. Teng, Yin-Pei, 2023. "Natural resources extraction and sustainable development: Linear and non-linear resources curse hypothesis perspective for high income countries," Resources Policy, Elsevier, vol. 83(C).
    8. Oskar Juszczyk & Juliusz Juszczyk & Sławomir Juszczyk & Josu Takala, 2022. "Barriers for Renewable Energy Technologies Diffusion: Empirical Evidence from Finland and Poland," Energies, MDPI, vol. 15(2), pages 1-14, January.
    9. Safi, Adnan & Wei, Xin & Sansaloni, Eduard Montesinos & Umar, Muhammad, 2023. "Breaking down the complexity of sustainable development: A focus on resources, economic complexity, and innovation," Resources Policy, Elsevier, vol. 83(C).
    10. Bai, Jiancheng & Han, Zhiyong & Rizvi, Syed Kumail Abbas & Naqvi, Bushra, 2023. "Green trade or green technology? The way forward for G-7 economies to achieve COP 26 targets while making competing policy choices," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    11. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    12. Joakim Westerlund, 2007. "Testing for Error Correction in Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 709-748, December.
    13. Machado, José A.F. & Santos Silva, J.M.C., 2019. "Quantiles via moments," Journal of Econometrics, Elsevier, vol. 213(1), pages 145-173.
    14. Cai, Lu & Le, Thanh Tiep, 2023. "Natural resources and financial development: Role of corporate social responsibility on green economic growth in Vietnam," Resources Policy, Elsevier, vol. 81(C).
    15. Li, Menghan & Zhang, Kaiyue & Alamri, Ahmad Mohammed & Ageli, Mohammed Moosa & Khan, Numan, 2023. "Resource curse hypothesis and sustainable development: Evaluating the role of renewable energy and R&D," Resources Policy, Elsevier, vol. 81(C).
    16. Su, Chi Wei & Liu, Fangying & Stefea, Petru & Umar, Muhammad, 2023. "Does technology innovation help to achieve carbon neutrality?," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1-14.
    17. Ji, Xiangfeng & Song, Tianyu & Umar, Muhammad & Safi, Adnan, 2023. "How China is mitigating resource curse through infrastructural development?," Resources Policy, Elsevier, vol. 82(C).
    18. Li, Zongyun & Rizvi, Syed Kumail Abbas & Rubbaniy, Ghulame & Umar, Muhammad, 2021. "Understanding the dynamics of resource curse in G7 countries: The role of natural resource rents and the three facets of financial development," Resources Policy, Elsevier, vol. 73(C).
    19. Shan, Shan & Mirza, Nawazish & Umar, Muhammad & Hasnaoui, Amir, 2023. "The nexus of sustainable development, blue financing, digitalization, and financial intermediation," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
    20. Su, Chi-Wei & Pang, Li-Dong & Qin, Meng & Lobonţ, Oana-Ramona & Umar, Muhammad, 2023. "The spillover effects among fossil fuel, renewables and carbon markets: Evidence under the dual dilemma of climate change and energy crises," Energy, Elsevier, vol. 274(C).
    21. 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.
    22. Naqvi, Bushra & Rizvi, Syed Kumail Abbas & Mirza, Nawazish & Umar, Muhammad, 2023. "Financial market development: A potentiating policy choice for the green transition in G7 economies," International Review of Financial Analysis, Elsevier, vol. 87(C).
    23. Odhiambo, Nicholas M., 2022. "Information technology, income inequality and economic growth in sub-Saharan African countries," Telecommunications Policy, Elsevier, vol. 46(6).
    24. Umar, Muhammad & Safi, Adnan, 2023. "Do green finance and innovation matter for environmental protection? A case of OECD economies," Energy Economics, Elsevier, vol. 119(C).
    25. Hahn, Jinyong, 1995. "Bootstrapping Quantile Regression Estimators," Econometric Theory, Cambridge University Press, vol. 11(1), pages 105-121, February.
    26. Danish, & Ulucak, Recep & Baloch, Muhammad Awais, 2023. "An empirical approach to the nexus between natural resources and environmental pollution: Do economic policy and environmental-related technologies make any difference?," Resources Policy, Elsevier, vol. 81(C).
    27. Lin, Renzao & Wang, Zhe & Gao, Chunjiao, 2023. "Re-examining resources taxes and sustainable financial expansion: An empirical evidence of novel panel methods for China's provincial data," Resources Policy, Elsevier, vol. 80(C).
    28. Çetin, Murat & Sarıgül, Sevgi Sümerli & Işık, Cem & Avcı, Pınar & Ahmad, Munir & Alvarado, Rafael, 2023. "The impact of natural resources, economic growth, savings, and current account balance on financial sector development: Theory and empirical evidence," Resources Policy, Elsevier, vol. 81(C).
    29. Umar, Muhammad & Farid, Saqib & Naeem, Muhammad Abubakr, 2022. "Time-frequency connectedness among clean-energy stocks and fossil fuel markets: Comparison between financial, oil and pandemic crisis," Energy, Elsevier, vol. 240(C).
    30. Liu, Qiang & Zhao, Zhongwei & Liu, Yiran & He, Yao, 2022. "Natural resources commodity prices volatility, economic performance and environment: Evaluating the role of oil rents," Resources Policy, Elsevier, vol. 76(C).
    31. Chen, Fei-fei & Wang, Qiu-Su & Umar, Muhammad & Zheng, Liya, 2023. "Towards sustainable resource management: The role of governance, natural resource rent and energy productivity," Resources Policy, Elsevier, vol. 85(PA).
    32. Lei, Wei & Yang, Jiaxin, 2022. "Does economic, political, and financial risk cause volatility in natural resources? Comparative study of China and Brazil," Resources Policy, Elsevier, vol. 77(C).
    33. Ma, Qiang & Tariq, Muhammad & Mahmood, Haider & Khan, Zeeshan, 2022. "The nexus between digital economy and carbon dioxide emissions in China: The moderating role of investments in research and development," Technology in Society, Elsevier, vol. 68(C).
    34. Asif Raihan & Rawshan Ara Begum & Mohd Nizam Mohd Said & Joy Jacqueline Pereira, 2022. "Relationship between economic growth, renewable energy use, technological innovation, and carbon emission toward achieving Malaysia’s Paris agreement," Environment Systems and Decisions, Springer, vol. 42(4), pages 586-607, December.
    35. Muhammad Asif Khan & Dongmin Kong & Junyi Xiang & Jian Zhang, 2020. "Impact of Institutional Quality on Financial Development: Cross-Country Evidence based on Emerging and Growth-Leading Economies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(15), pages 3829-3845, December.
    36. Ahmad, Mahmood & Dai, Jiapeng & Mehmood, Usman & Abou Houran, Mohamad, 2023. "Renewable energy transition, resource richness, economic growth, and environmental quality: Assessing the role of financial globalization," Renewable Energy, Elsevier, vol. 216(C).
    37. Yang, Jinxuan & Rizvi, Syed Kumail Abbas & Tan, Zhixiong & Umar, Muhammad & Koondhar, Mansoor Ahmed, 2021. "The competing role of natural gas and oil as fossil fuel and the non-linear dynamics of resource curse in Russia," Resources Policy, Elsevier, vol. 72(C).
    Full references (including those not matched with items on IDEAS)

    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. Xiong, Su & Luo, Rong, 2023. "Investigating the relationship between digital trade, natural resources, energy transition, and green productivity: Moderating role of R&D investment," Resources Policy, Elsevier, vol. 86(PB).
    2. Xie, Xin & Liu, Yufeng & Jiang, Xiaoxi & Wang, Zi Xuan, 2024. "Natural resources utilization, ICT growth, and renewable energy consumption: Pathways to sustainable development in China," Resources Policy, Elsevier, vol. 89(C).
    3. Wang, Zhen & Hu, Difei & Sami, Fariha & Uktamov, Khusniddin Fakhriddinovich, 2023. "Revisiting China's natural resources-growth-emissions nexus: Education expenditures and renewable energy innovation," Resources Policy, Elsevier, vol. 85(PA).
    4. Tan, Yali & Huang, Sen, 2023. "Sustainable development through digitalization: An exploration of natural resource extraction in China," Resources Policy, Elsevier, vol. 86(PA).
    5. 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).
    6. Khaddage-Soboh, Nada & Safi, Adnan & Faisal Rasheed, Muhammad & Hasnaoui, Amir, 2023. "Examining the role of natural resource rent, environmental regulations, and environmental taxes in sustainable development: Evidence from G-7 economies," Resources Policy, Elsevier, vol. 86(PA).
    7. Xu, Shulin & Li, Xiangyu & Ahmed, Rahil Irfan & Norena-Chavez, Diego, 2023. "Unlocking the potential of natural resources: Transforming the resource curse into a sustainable development corridor through research and development," Resources Policy, Elsevier, vol. 87(PA).
    8. Tian, Lulu & Yan, Wenying & Xu, Baochang & Hasnaoui, Amir, 2024. "Beyond the resource curse: The multifaceted impact of mineral resources, financial systems, and workforce competence," Resources Policy, Elsevier, vol. 89(C).
    9. Khan, Yasir & Hassan, Taimoor, 2024. "Promoting sustainable development: Evaluating the influence of natural resources, high-tech export and corruption on CO2 emissions in developing economies," Resources Policy, Elsevier, vol. 88(C).
    10. Li, Tianyu & Yue, Xiao-Guang & Waheed, Humayun & Yıldırım, Bilal, 2023. "Can energy efficiency and natural resources foster economic growth? Evidence from BRICS countries," Resources Policy, Elsevier, vol. 83(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. Jiao, Lei & Zhou, Dongjie & Xu, Runguo, 2024. "Resource dynamics and economic expansion: Unveiling the asymmetric effects of natural resources and FDI on economic growth with a lens on energy efficiency," Resources Policy, Elsevier, vol. 89(C).
    13. Khan, Yasir & Hassan, Taimoor & Guiqin, Huang & Nabi, Ghulam, 2023. "Analyzing the impact of natural resources and rule of law on sustainable environment: A proposed policy framework for BRICS economies," Resources Policy, Elsevier, vol. 86(PA).
    14. Xie, Hao & Chang, Shuangshuang & Liu, Pengqiang & Lin, Regina Fang-Ying, 2024. "Sustainable development: Uncovering the synergy between natural resources, clean technologies, and economic progress," Resources Policy, Elsevier, vol. 88(C).
    15. Yang, Bin & Wu, Qiong & Sharif, Arshian & Uddin, Gazi Salah, 2023. "Non-linear impact of natural resources, green financing, and energy transition on sustainable environment: A way out for common prosperity in NORDIC countries," Resources Policy, Elsevier, vol. 83(C).
    16. 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).
    17. Dai, Siwei & Du, Xiaoyan, 2023. "Discovering the role of trade diversification, natural resources, and environmental policy stringency on ecological sustainability in the BRICST region," Resources Policy, Elsevier, vol. 85(PB).
    18. Song, Chenchen & Wu, Zhendong & Dong, Rebecca Kechen & Dinçer, Hasan, 2023. "Greening south Asia: Investing in sustainability and innovation to preserve natural resources and combat environmental pollution," Resources Policy, Elsevier, vol. 86(PB).
    19. Zheng, ShiYong & Liu, Hua & Hafeez, Muhammad & Wang, Xiaofeng & Fahad, Shah & Yue, Xiao-Guang, 2023. "Testing the resource curse hypothesis: The dynamic roles of institutional quality, inflation and growth for Dragon," Resources Policy, Elsevier, vol. 85(PA).
    20. Chen, Fei-fei & Wang, Qiu-Su & Umar, Muhammad & Zheng, Liya, 2023. "Towards sustainable resource management: The role of governance, natural resource rent and energy productivity," Resources Policy, Elsevier, vol. 85(PA).

    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:86:y:2023:i:pa:s0301420723010048. 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.