Revisiting the natural resources-financial development nexus in China: The importance of economic policy uncertainty

Yizhong Sun, Keyan Jin, Deyong Wang, Qingyang Wu and Zhezhou Li

Resources Policy, 2023, vol. 86, issue PB

Abstract: The existing literature extensively probes how natural resources impact financial development, however, there is no evidence on the role of economic policy uncertainty amidst the natural resources-financial development nexus. Moreover, the prior literature ignores the effect of structural breaks while estimating the parameters. Based on such arguments, this study investigates the combine impact of natural resources and economic policy uncertainty on financial development in case of China for the period of 1989–2021. In doing so, we apply noval econometric approach which handles the structural breaks named as Fourier Autoregressive Distributed Lag (FARDL) aaproach. Our findings show that natural resources escalate financial development, however, the synergy of natural resources and economic policy uncertainty plunges financial development across the long-run and short-run. Further, we run sensitivity analysis and find the results similar to the baseline outcomes. The results compel us to suggest some policy recommendations. For instance, policymakers should strive to control economic policy uncertainty in China for the promotion of financial development.

Keywords: Natural resources; Financial development; Economic policy uncertainty; Fourier ARDL (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301420723008930
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:86:y:2023:i:pb:s0301420723008930

DOI: 10.1016/j.resourpol.2023.104182

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 ().