Natural resources and sustainable financial development: Evidence from South Asian economies

Can Zhang and Qian Liang

Resources Policy, 2023, vol. 80, issue C

Abstract: In contemporary times, the existing literature provides a blurred image regarding the connection between natural resources and financial market development. Some studies validate the financial resource curse, while others reveal financial resource blessings. To reach a true conclusion, this study analyzes the impact of natural resources on financial market development in the presence of financial risk and technological innovation. Exploring the nexus in four South Asian economies, this study covers the period from 1990 to 2020. Due to the data's asymmetric distribution, this study uses the novel non-parametric (bootstrap quantile regression) technique. The empirical results revealed that natural resources are a curse in the development of financial markets. That is, natural resources are negatively associated with financial market development. On the other hand, financial risk and technological innovation are the substantial factors of financial market development, which positively affect financial markets throughout quantiles. The robustness of the model is also tested via parametric (robust regression) and non-parametric (panel quantile regression) approaches. Unidirectional causal impact is observed from natural resources, financial risk, technological innovation, and financial market development. Based on the empirical findings, this study directed the channelization of natural resources, reducing financial risk and enhancing investment in research, development, and human capital.

Keywords: Natural resources; Financial development; Financial risk; Technological innovation; Non-parametric techniques (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420722007255
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:80:y:2023:i:c:s0301420722007255

DOI: 10.1016/j.resourpol.2022.103282

Access Statistics for this article

Resources Policy is currently edited by R. G. Eggert

More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().