The Dynamic Impact of Natural Resource Rents, Financial Development, and Technological Innovations on Environmental Quality: Empirical Evidence from BRI Economies

Siming Zuo, Mingxia Zhu, Zhexiao Xu, Judit Oláh and Zoltan Lakner
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Siming Zuo: School of Economics, Beijing Technology and Business University, Beijing 100029, China
Mingxia Zhu: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Zhexiao Xu: Graduate School, University of International Business and Economics, Beijing 100029, China
Judit Oláh: Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary
Zoltan Lakner: Department of Food Economics, Faculty of Food Science, Hungarian University of Agriculture and Life Science (MATE), 2100 Godollo, Hungary

IJERPH, 2021, vol. 19, issue 1, 1-17

Abstract: Until recently, many countries’ policies were motivated by economic growth; however, few strategies were developed to prevent environmental deterioration including reducing the ecological footprint. In this context, the purpose of this study was to analyze the role of natural resource rents, technological innovation, and financial development on the ecological footprint in 90 Belt and Road Initiative (BRI) economies. This research divided the BRI economies into high income, middle-income, and low-income levels to capture income differences. This research used the second-generation panel unit root, cointegration, and augmented mean group estimators to calculate the robust and reliable outcomes. Based on the annual data from 1991 to 2018, the findings show that natural resource rents drastically damage the quality of the environment, whereas technological innovations are helpful in reducing ecological footprint. Moreover, the outcome of the interaction term (natural resource rents and technological innovations) negatively impacts the ecological footprint. Interestingly, these findings were similar in the three income groups. In addition, financial development improved environmental quality in the middle-income BRI economies, but reduced it in high-income, low-income, and full sample countries. Furthermore, the Environmental Kuznets Curve (EKC) concept has been validated across all BRI economies. Policymakers in BRI countries should move resources away from resource-rich sectors of industries/manufacturing sectors to enhance/promote economic growth and use these NRRs efficiently for a progressive, sustainable environment. Based on these findings, several efficient policy suggestions are proposed.

Keywords: natural resources rents; technological innovation; financial development; Environmental Kuznets Curve (EKC); ecological footprint; Belt and Road Initiative (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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