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Impacts of economic development, globalization, and gross capital formation on natural resources rents: Evidence from India

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  • Roy, Arup

Abstract

Natural resources are a country's wealth, and resources economics and policy literature has extensively researched how to utilize this richness as a determinant of the country's growth. However, the primary challenges reside in establishing economic development as a driver for natural resource rents. Given this context, this study explores the association between economic development, globalization, gross capital formation, and natural resources rents in India. For the empirical research, the study employed Dynamic Auto-Regressive Distributive Lag (DARDL) simulation and Kernel-based Regularized Least Squares (KRLS) approaches on yearly data from 1990 to 2020. The present research used a unit root test to ascertain the stationary state across all variables, establishing their long-term cointegration connection. Results suggest that capital formation and economic development positively impact rents derived from natural resources in India, while globalization negatively affects natural resources rents. Unidirectional causation of economic development, globalization, and gross capital creation to natural resources rents has been established in this study using the Toda-Yamamoto causality model. Our findings have important policy implications and support the idea that sustainable economic growth models inherently rely on factors like the efficient utilization of natural resources and globalization.

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  • Roy, Arup, 2024. "Impacts of economic development, globalization, and gross capital formation on natural resources rents: Evidence from India," Resources Policy, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:jrpoli:v:97:y:2024:i:c:s0301420724006263
    DOI: 10.1016/j.resourpol.2024.105259
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    More about this item

    Keywords

    Natural resource rent; Globalization; Economic growth; Gross capital formation; DARDL;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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