The impact of institutional quality, natural resources, and finance-growth on China's economic recovery: An empirical study

Chunhui Huo, Javaria Hameed, Gadah Albasher and Ming Pang

Resources Policy, 2023, vol. 83, issue C

Abstract: Developing economies are opening up to trade & financial expansion, which may impact the economic evolution. This research adds in literature by investigating the connection between financial development, institutional quality, natural resources, and their impact on China's economic performance (1977–2021). The Johansen cointegration technique examines the long-run cointegrating relationship among variables.The vector error correction model captures the longrun and short-run co-efficients. The results reveal that high population expansion lowers growth but natural resource quality and institutional quality have the opposite effects. The results of the study show that the nexus between gross fixed capital formation & financial development do not stimulate growth, but rather institutional quality moderates effect of natural resource rent on finance. In short, this study provides a novel hypothesis for policymakers to evaluate the significance of institutions in developing realistic estimates and policy inputs and support a robust role for institutional quality and natural resource exploration for rapid growth.

Keywords: Institutional quality; Natural resources; Financial development; Growth; VECM; Chinese economic recovery (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:83:y:2023:i:c:s0301420723004518

DOI: 10.1016/j.resourpol.2023.103740

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