IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v89y2024ics0301420723013314.html
   My bibliography  Save this article

Beyond the resource curse: The multifaceted impact of mineral resources, financial systems, and workforce competence

Author

Listed:
  • Tian, Lulu
  • Yan, Wenying
  • Xu, Baochang
  • Hasnaoui, Amir

Abstract

This research provides a fresh perspective by examining the impact of natural resources and the financial development index on the economic growth of the USA from 1983 to 2021. It utilizes foreign direct investment (FDI) and the human capital index as control variables. Several methodological approaches were employed, including DF-GLS and ADF with breaks for unit root testing, Bayer-Hanck for long-run co-integration, and FMOLS, DOLS, and CCR to ascertain the long-run elasticities among the variables. Robustness checks were performed using various techniques, including least squares regression—with and without breaks—robust least squares and quantile regression as non-parametric methods. To determine the causality, Granger causality analysis was employed. Results identified stable differences in the variables, confirming long-run equilibrium. Principal findings suggest that natural resources positively and significantly impact long-term economic growth, underscoring the ‘resource blessing’ effect in the USA. Moreover, the financial development index was found to stimulate economic growth. Findings from control variables notably affirmed the economic growth in the USA. These outcomes remained consistent and valid across both parametric and non-parametric robustness checks. Causality analysis revealed that FDI, the financial development index, and total natural resources have an uni-directional effect on economic growth, while human capital has a bi-directional causality with economic growth. This study suggests policies to utilize natural resources in tangible sectors further, emphasizing the role of financial development, human capital enhancement, and FDI stimulation.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:jrpoli:v:89:y:2024:i:c:s0301420723013314
    DOI: 10.1016/j.resourpol.2023.104620
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723013314
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.104620?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. Park, Joon Y, 1992. "Canonical Cointegrating Regressions," Econometrica, Econometric Society, vol. 60(1), pages 119-143, January.
    2. Zhou, Lianjie & Hu, Junhui & Liu, Dongshuang & He, Mengwei, 2023. "Studying the role of fiscal policy to utilize natural resources development: Leads to sustainable development goals," Resources Policy, Elsevier, vol. 84(C).
    3. Hamza Almassri & Huseyin Ozdeser & Andisheh Saliminezhad, 2023. "Revisiting the finance-growth nexus in Hong Kong: fresh insights from nonparametric analysis," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 50(5), pages 1073-1086, January.
    4. 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).
    5. 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).
    6. Diby Francois Kassi & Yao Li & Zhankui Dong, 2023. "The mitigating effect of governance quality on the finance‐renewable energy‐growth nexus: Some international evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 316-354, January.
    7. Luo, Jing & Ali, Syed Ahtsham & Aziz, Babar & Aljarba, Ahmed & Akeel, Hatem & Hanif, Imran, 2023. "Impact of natural resource rents and economic growth on environmental degradation in the context of COP-26: Evidence from low-income, middle-income, and high-income Asian countries," Resources Policy, Elsevier, vol. 80(C).
    8. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
    9. Zhang, Yi & Kumar, Sanjay & Huang, Xianhai & Yuan, Yiming, 2023. "Human capital quality and the regional economic growth: Evidence from China," Journal of Asian Economics, Elsevier, vol. 86(C).
    10. 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).
    11. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, November.
    12. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
    13. Fu, Guomin & Zhu, Sijia, 2023. "Innovation, financial risk and natural resources for sustainable development: Fresh evidence from BRICS economies," Resources Policy, Elsevier, vol. 80(C).
    14. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    15. Hayat, Sikandar & Safi, Adnan & Wahab, Salman & Shahzad, Khurram & Chen, Yingying, 2023. "Renewable energy R&D and natural resources: A success story of environmentally friendly financing in OECD economies," Resources Policy, Elsevier, vol. 83(C).
    16. Ji, Xiangfeng & Song, Tianyu & Umar, Muhammad & Safi, Adnan, 2023. "How China is mitigating resource curse through infrastructural development?," Resources Policy, Elsevier, vol. 82(C).
    17. Peter Boswijk, H., 1994. "Testing for an unstable root in conditional and structural error correction models," Journal of Econometrics, Elsevier, vol. 63(1), pages 37-60, July.
    18. Ozili, Peterson K & Lay, Sok Heng & Syed, Aamir, 2023. "Impact of financial inclusion on economic growth in secular and religious countries," MPRA Paper 116413, University Library of Munich, Germany.
    19. Khan, Muhammad Atif & Gu, Lulu & Khan, Muhammad Asif & Oláh, Judit, 2020. "Natural resources and financial development: The role of institutional quality," Journal of Multinational Financial Management, Elsevier, vol. 56(C).
    20. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    21. Anindya Banerjee & Juan Dolado & Ricardo Mestre, 1998. "Error‐correction Mechanism Tests for Cointegration in a Single‐equation Framework," Journal of Time Series Analysis, Wiley Blackwell, vol. 19(3), pages 267-283, May.
    22. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 99-125.
    23. Peterson K. Ozili & Sok Heng Lay & Aamir Aijaz Syed, 2023. "Impact of financial inclusion on economic growth in secular and religious countries," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 31(4), pages 420-444, February.
    24. 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).
    25. 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).
    26. Yosra Saidi & Anis Ochi & Samir Maktouf, 2023. "FDI inflows, economic growth, and governance quality trilogy in developing countries: A panel VAR analysis," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 426-449, April.
    27. Safi, Adnan & Haseeb, Muhammad & Islam, Madeeha & Umar, Muhammad, 2023. "Can sustainable resource management overcome geopolitical risk?," Resources Policy, Elsevier, vol. 87(PB).
    28. Awais, Minahil & Afzal, Ayesha & Firdousi, Saba & Hasnaoui, Amir, 2023. "Is fintech the new path to sustainable resource utilisation and economic development?," Resources Policy, Elsevier, vol. 81(C).
    29. 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.
    30. 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).
    31. 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).
    32. Christian Bayer & Christoph Hanck, 2013. "Combining non-cointegration tests," Journal of Time Series Analysis, Wiley Blackwell, vol. 34(1), pages 83-95, January.
    33. 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).
    34. Khan, Zeeshan & Haouas, Ilham & Trinh, Hai Hong & Badeeb, Ramez Abubakr & Zhang, Changyong, 2023. "Financial inclusion and energy poverty nexus in the era of globalization: Role of composite risk index and energy investment in emerging economies," Renewable Energy, Elsevier, vol. 204(C), pages 382-399.
    35. 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. 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).
    2. Gong, Qinyi & Ying, Limeng & Dai, Jiapeng, 2023. "Green finance and energy natural resources nexus with economic performance: A novel evidence from China," Resources Policy, Elsevier, vol. 84(C).
    3. Wang, Xinghua & Su, Chi-Wei & Xue, Ziru & Xie, Xin, 2023. "Sustainable development goals perspective of natural resources: Does it paves the way for renewable sources of energy? A global case study," Resources Policy, Elsevier, vol. 86(PB).
    4. Xue, Pengcheng & Du, Jianhua & Liu, Jiaxin & Li, Zhipeng & Albahooth, Bayan & Yang, Yiting, 2023. "Natural resources and economic perspective: Manufacturing value added for Europe and Central Asian economies," Resources Policy, Elsevier, vol. 86(PA).
    5. Lin, Ling & Li, Mu & Hou, Xinmeng & Zahid Piprani, Arsalan, 2024. "The resource curse in least developed countries: The roles of foreign direct investment, energy efficiency, and electricity access," Resources Policy, Elsevier, vol. 89(C).
    6. Zhang, Meng-Chen & Lin, Chun-Yu & Wei, Ying, 2023. "Natural resources exploration, efficiency of energy resources and financial development: Resources sector analysis via least square with structural breaks," Resources Policy, Elsevier, vol. 85(PA).
    7. 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).
    8. Wang, Shubin & Wang, Tingting & Li, Jiabao & Zhao, Erlong, 2023. "Resource curse hypothesis in COP26 perspective: Access to clean fuel technology and electricity from renewable energy," Resources Policy, Elsevier, vol. 82(C).
    9. Chen, Fu & Xu, Jie & Zhang, Weiwei & Wei, Bowen & Li, Tingting, 2023. "Capital formation and natural resources extraction: A source of sustainable development or a curse for the economy?," Resources Policy, Elsevier, vol. 85(PB).
    10. Zhong, Yufei & Chen, Xuesheng & Yao, Xuehui & Wang, Zhixian & Chang, Hsu-Ling, 2024. "Natural resources and the trilemma of financial development, institutions, and markets: Sustainable development pathway via natural resources for China," Resources Policy, Elsevier, vol. 90(C).
    11. Li, Shi & Chen, Lei & Jiang, Tao & Wang, YingJie & Shen, Congcong, 2024. "Multidimensional financial development and natural resources: A path for sustainable development via natural resources and digitalization," Resources Policy, Elsevier, vol. 88(C).
    12. Xu, Yanling & Xu, Tian & Huang, Xiying & Chu, Chien-Chi, 2024. "Natural resources a curse or blessing: The story of Latin American and Caribbean economies employing bootstrap quantile method," Resources Policy, Elsevier, vol. 90(C).
    13. Yu, Ti-Ming & Yan, Yu-Tong & Yin, Ya-Hua & Yang, Ming-Gao, 2023. "Are natural resources and oil prices a possible solution to renewable energy electricity? Evidence from global time series data," Resources Policy, Elsevier, vol. 86(PB).
    14. Yu, Xiuzhi & Jia, Fengshuo & Khan, Suliman & Khan, Zeeshan & Nassani, Abdelmohsen A., 2024. "Natural resources a curse or blessings for international trade? Empirical evidence from high indebted economies," Resources Policy, Elsevier, vol. 89(C).
    15. Wan, Muchun & Mughal, Nafeesa & Peng, Tao & Yepez Peña, Miguel Angel, 2024. "Resources extraction and access to clean energy a curse or blessing for the economy? Middle-income economies case study," Resources Policy, Elsevier, vol. 88(C).
    16. Chen, Jingquan & Ma, Wanying & Kchouri, Bilal & Ribeiro-Navarrete, Samuel, 2024. "Resource rich yet debt ridden: The role of natural resources and debt servicing in sustainable economic growth," Resources Policy, Elsevier, vol. 89(C).
    17. Li, Jiaqi & Li, Yushan & Zheng, Ziqi & Si, Xiaoyu, 2023. "Environment and natural resources degradation under COVID-19 crises: Recovery post pandemic," Resources Policy, Elsevier, vol. 83(C).
    18. 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).
    19. Hao, Linna & Meng, Qin & Umar, Muhammad & Long, Chi, 2024. "Mineral resources and intellectual capital: Asymmetrical impacts and sustainable development outcomes," Resources Policy, Elsevier, vol. 91(C).
    20. Liu, Bailu & Tian, Jilin, 2023. "Natural resources led innovation: Employing structural break approach to explore USA's natural resources sector," 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:89:y:2024:i:c:s0301420723013314. 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.