Asymmetric role of natural resources dependence, industrialization, and foreign direct investment in China’s economic growth

Yongming Huang, Syed Muhammad Faraz Raza and Muhammad Usman

Resources Policy, 2023, vol. 85, issue PB

Abstract: China’s industrial sector is performing continuously in economic activity, aiding its share in the economy's progression. This study aims to analyze the asymmetric positive-negative shocks' influence of industrial value-added, foreign direct investment, technological innovation and natural resources on China's economic growth. We take the data of the concerned indicators from 1986 to 2019 and apply N-ARDL on the model for empirical short and long-run asymmetric estimation. The findings illustrate the positive effect of industrial value-added on economic growth during positive shock and adverse during negative shock. Similarly, technological innovation is affirmative in the acquisition of economic growth in both conditions of positive-negative shock. In contrast, foreign direct investment and natural resource rents have no growth implication during positive shock, while adversative during negative shock in the short and long run. The error correction term has stabilized the error that arises from the short to the long run. At the same time, asymmetric multiplier plots demonstrate a new equilibrium equation of asymmetric adaptations of economic growth after the positive-negative shocks. In the end, result-based suggestions recommend government and policymakers' attention toward heavy and secondary industries, technology-intensive policies, and adaptation of sustainable resources.

Keywords: Industrial value-added; Foreign direct investment; Technological innovation; Natural resource rents; Asymmetric effects (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:85:y:2023:i:pb:s0301420723006438

DOI: 10.1016/j.resourpol.2023.103932

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