Natural resources and financial development: Role of business regulations in testing the resource-curse hypothesis in ASEAN countries

Chang Tang, Muhammad Irfan (), Asif Razzaq and Vishal Dagar ()

Resources Policy, 2022, vol. 76, issue C

Abstract: The natural resource curse hypothesis is largely discussed in the empirical literature; however, little is known regarding the financial resource curse hypothesis through the integration of business regulations. Also, most empirical research in the literature has used conventional estimation methods. To address these research gaps, this paper examines the financial resource curse hypothesis by scrutinizing the linkage between financial development and natural resources rent from 1984 to 2018. Empirical results validate the financial resource curse hypothesis. Business regulations encourage financial development and neutralize the negative consequences of natural resources on financial development. It implies that conducive business regulations mitigate the financial resource curse in ASEAN countries. This condition may be considered essential for the sustainability of natural resource rent-related advancements in financial development, and appropriate policy recommendations could be put forward.

Keywords: Natural resource abundance; Financial development; Financial resource curse; Business regulations; ASEAN countries (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (114)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:76:y:2022:i:c:s0301420722000617

DOI: 10.1016/j.resourpol.2022.102612

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