Economic performance and natural resources: Evaluating the role of economic risk

Wei Deng, Rabia Akram and Nawazish Mirza

Resources Policy, 2022, vol. 78, issue C

Abstract: Natural resources and economic performance have been under discussion for the last three decades. Still, the picture is not clear due to the contradictory arguments of scholars and researchers. To end this debate, the current study investigates the association between natural resources and the economic performance of Brazil, Russia, India, China, and South Africa (BRICS) over the 1990–2020 period. Also, the role of economic risk, renewable energy consumption, and technological innovation has been investigated. The empirical estimates validate the panel's slope heterogeneity and cross-sectional dependence, which leads to adopting the second-generation unit root test. Using panel quantile regression, the findings unveil that natural resources are a blessing for the selected economies. Also, renewable energy consumption and technological innovation are significant contributors to economic growth. Besides, the magnitude of natural resources and the renewable energy consumption is found to significantly increase from lower quantile (Q0.25) to medium (Q0.50) and higher quantiles (Q0.75). Conversely, the magnitude of technological innovation decreases while moving from lower to higher quantiles. The empirical findings are robust, as reported by dynamic ordinary least squares. Moreover, the causal association between economic performance and technological innovation is found bidirectional. However, a unidirectional causality has been observed from natural resources, renewable energy consumption, and economic risk to economic growth. This study recommends the efficient utilization of natural resources, investment in renewable energy sources, and research and development for technological advancement.

Keywords: Economic performance; Natural resources; Renewable energy consumption; Technological innovation; Economic risk (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:78:y:2022:i:c:s0301420722002884

DOI: 10.1016/j.resourpol.2022.102840

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