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Mineral resource rent and sustainable transition: The mediating role of financial development

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  • Wang, Yonglong
  • Wang, Rui

Abstract

This paper examines the interrelationships among mineral resource rent, sustainable development, and financial development in ten East Asian nations (excluding some due to data limitations) over the period 2005 to 2020, employing SYS-GMM analysis. The findings of the models unveil noteworthy impacts. In Model I, emphasis is placed on the significance of the lag first-order term for sustainable development, wherein financial market growth accentuates the sustainable development index by nearly 0.18% per 1% increase. Model II illustrates a positive association between financial market development and mineral rents, driven by enhanced investment capacities and infrastructure development. Model III underscores the relevance of mineral rents, demonstrating that a 1% increase correlates with a approximately 0.063% rise in the sustainable development index. The study underscores the adverse effects of inward foreign direct investment (FDI) on sustainability and highlights the negative influence of financial risk. Practical recommendations include the promotion of a green financial market, environmentally conscious mineral exploration, optimized logistics, and the utilization of AI and big data to bolster the sustainability of mineral companies.

Suggested Citation

  • Wang, Yonglong & Wang, Rui, 2024. "Mineral resource rent and sustainable transition: The mediating role of financial development," Resources Policy, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:jrpoli:v:89:y:2024:i:c:s0301420723012382
    DOI: 10.1016/j.resourpol.2023.104527
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    More about this item

    Keywords

    Mineral rents; Sustainable development; Financial development; System-GMM; East Asia;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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