Natural Resource Rents and Social Capital Interaction: New Evidence on the Role of Financial Development

Farzaneh Ahmadian-Yazdi, Mahsa Mesgarani () and Soheil Roudari ()
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Farzaneh Ahmadian-Yazdi: Ferdowsi University of Mashhad, Azadi Sq., Mashhad 9177948974, Iran
Mahsa Mesgarani: Ferdowsi University of Mashhad, Azadi Sq., Mashhad 9177948974, Iran
Soheil Roudari: ��Department of Economics, University of Qom, 3716146611, Iran

Journal of Environmental Assessment Policy and Management (JEAPM), 2022, vol. 24, issue 01, 1-30

Abstract: The varied opinions on financial developmental impacts on growth in different economies have been the subject of considerable debates among economists during the last two decades, especially in natural-resource-rich countries. However, the role of financial development on a crucial channel of growth, i.e. social capital, has been neglected. Unlike previous studies, the level of income in resource-based economies has been considered an important factor influencing the way financial development affects social capital-resource rents’ interactions. Thus, in this paper, the impact of financial development as an infrastructure to turn natural capital into social capital has been investigated in two groups of resource-abundant countries using a panel data model during 2009:Q1-2016:Q4. The empirical results in the case of high-income economies show that a high level of financial development can ensure resource rents, positively influencing social capital. However, findings indicate an adverse impact of natural resource rents on social capital in medium-income countries.

Keywords: Financial development; natural resource rents; social capital; panel data analysis (search for similar items in EconPapers)
JEL-codes: C23 E22 G20 O13 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (13)

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DOI: 10.1142/S1464333222500211

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