Natural resources rents, capital formation and economic performance: Evaluating the role of globalization

Ying Li, Muhammad Tariq, Saleem Khan, Husam Rjoub and Aisha Azhar

Resources Policy, 2022, vol. 78, issue C

Abstract: In recent decades, natural resources have been regarded as an important factor for the economic performance of the countries. However, developed economies are more recognized for better Globalization and the use of renewable Energy. This study aims to analyze the influence of natural resources rents, Globalization, renewable energy consumption, and gross capital formation on the economic performance of the group of seven economies over the period 1990–2020. This study used panel data specifications such as slope heterogeneity and cross-section dependence. Also, this study used the second-generation unit root test, which confirms the stationarity of all variables. All the variables are found in the long-run cointegration relationship but hold the property of non-normality. Hence, this study uses a novel Method of Moments Quantile Regression. The estimated outcomes asserted that natural resources rents, Globalization, and gross capital formation positively and significantly impact economic performance in all (Q0.25, Q0.50, Q0.75, and Q0.85) quantiles. At the same time, renewable energy consumption adversely affects the panel economies' economic performance. Moreover, there are bidirectional causalities between the explanatory variables and economic performance. On the basis of empirical findings, this study recommends policies regarding the sustainable use of the natural resource, increased Globalization, gross capital formation, and revised policies for renewable energy consumption.

Keywords: Natural resources; Economic performance; Renewable energy; Globalization; Capital formation (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:78:y:2022:i:c:s0301420722002653

DOI: 10.1016/j.resourpol.2022.102817

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