How China is mitigating resource curse through infrastructural development?

Xiangfeng Ji, Tianyu Song, Muhammad Umar and Adnan Safi

Resources Policy, 2023, vol. 82, issue C

Abstract: With the aim to stimulate economic activities, an effective and stable financial system is indispensable in each country, and meanwhile, natural resources should help to promote economic and financial development in that country. Motivated by this, we examine the effect of natural resources on financial development with the cointegration method, the cointegration regression (namely FMOLS and DOLS), and wavelet coherence approach in China. Mainly, we take the effect of transportation infrastructure into account and utilize economic growth as a control variable. The cointegration test indicates a long-run cointegration equation among natural resources, transportation infrastructure, economic growth, and financial development. Natural resources have a negative impact on financial development, which means the resource curse hypothesis exists, while transportation infrastructure and economic growth play a positive role in enhancing financial development in China. Furthermore, the results of a wavelet coherence analysis show that transportation infrastructure, natural resources, and financial development are all vulnerable at distinct frequencies. The results of FMOLS and DOLS are also supported by wavelet coherence. Our results have significant policy recommendations, indicating that efficient use of natural resources is required to promote sustainable and sound financial development.

Keywords: Natural resources; Transportation infrastructure; Economic growth; Financial development; Wavelet analysis; China (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S030142072300301X
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:82:y:2023:i:c:s030142072300301x

DOI: 10.1016/j.resourpol.2023.103590

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 ().