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The paradox of resource-richness: unraveling the effects on financial markets in natural resource abundant economies

Author

Listed:
  • Muhammad Imran

    (Hengxing University Qingdao
    Bahria University Islamabad
    Jiangsu University Zhenjiang)

  • Muhammad Kamran Khan

    (Wrocław University of Environmental and Life Sciences
    Bahria University Islamabad)

  • Salman Wahab

    (Qingdao University Qingdao)

  • Bilal Ahmed

    (Qingdao University Qingdao)

  • Zhang Jijian

    (Jiangsu University Zhenjiang)

Abstract

In the contemporary global landscape, understanding the nexus between financial inclusion and natural resource abundance is crucial, especially for resource-rich nations. This study uses diagnostic tests and method of moments quantile regression to examines this interplay across Australia, Brazil, Canada, China, India, Russia, and the United States. We find that achieving financial inclusion is significantly challenging for countries that heavily rely on natural resources. Diversified income sources and equitable wealth distribution are essential to mitigate these challenges. Additionally, we identify a positive correlation between economic development and financial inclusion, highlighting the mutually reinforcing relationship between growth and inclusivity. Our research also reveals a notable link between adopting renewable energy and improving financial inclusion, suggesting that environmental responsibility and financial accessibility are intertwined. Foreign direct investment has nuanced impacts on financial inclusion, adding depth to our understanding. Overall, stable income from natural resources and diversified economic development emerge as key promoters of financial inclusion. These insights advocate for regionally specific policies and lay a solid foundation for future research and informed policymaking that address financial inclusion challenges and advance sustainable development. Graphical abstract

Suggested Citation

  • Muhammad Imran & Muhammad Kamran Khan & Salman Wahab & Bilal Ahmed & Zhang Jijian, 2025. "The paradox of resource-richness: unraveling the effects on financial markets in natural resource abundant economies," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-30, December.
    • Handle: RePEc:spr:fininn:v:11:y:2025:i:1:d:10.1186_s40854-024-00696-2
    DOI: 10.1186/s40854-024-00696-2
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    More about this item

    Keywords

    Financial inclusion; Natural resource rents; Sustainable development; Energy consumption; Foreign direct investment; Method of moments quantile regression;
    All these keywords.

    JEL classification:

    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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