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Do fintech and trade diversification discard the natural resource dependency in MENA countries?

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  • Han, Zhanbing
  • Heng, Yixin

Abstract

Due to inefficient resource management systems, resource-endowed economies confront resource dependency. In this concern, fintech (FIN) and trade diversification (TD) are crucial factors to promote economic growth, particularly in the Middle East and North Africa (MENA) countries. In literature, the integrated influence of FIN and TD on economic growth in the MENA region remains unexplored. Therefore, this research scrutinizes the influence of FIN, TD, and natural resources (NR) on sustainable development from 2001 to 2020 by employing the cross-section autoregressive distributed lag (CS-ARDL) estimator. The empirical outcomes exhibit that NR significantly impedes economic growth and supports the resource-curse hypothesis, while FIN and TD play a tremendous role in upsurging inclusive growth and highlight the positive association with economic progress. Besides, the study explores the indirect moderating association among the pertinent variables. When the resource-abundant countries are embodied and equipped with TD and FIN, these nations are enabled to reduce resource dependency and foster economic growth. Thus, FIN and TD moderate the negative impact of the NR-led resource curse in the MENA region by 0.395% and 0.211%, respectively. The study estimated the consistent outcomes in short-run analysis with lower magnitude, and the robustness check further echoed the identical results from the CS-ARDL method. Finally, a bi-directional causal association prevails among all variables except capital investment and economic growth. Overall, the study provides valuable policy implications to all stakeholders.

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  • Han, Zhanbing & Heng, Yixin, 2024. "Do fintech and trade diversification discard the natural resource dependency in MENA countries?," Resources Policy, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:jrpoli:v:89:y:2024:i:c:s0301420723012072
    DOI: 10.1016/j.resourpol.2023.104496
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