Analysis of the impact of natural resources and globalization on environmental quality and economic growth: The study of SANE nations

Abstract

The outcome of resources and globalization on growth and the quality of the environment among SANE (South Africa, Algeria and Nigeria) nations from 1990 to 2020 was investigated in this study. Economic growth and environmental degradation are the dependent variables, whereas the independent variables are natural resources, population, foreign direct invest- ment, trade openness, globalization, domestic credit to private sector by banks and investment. The study utilizes FMOLS and Granger Causality estimation procedure. Findings from the environmental degradation outcome suggest that per capita gross domestic product, gross fixed capital formation and globalization have positive significant impact on the regressand while trade openness has adverse significant impact on environmental degradation. The result from the economic growth model indicates that natural resources and total population posi- tively and significantly influence per capita gross domestic product. The Granger causality outcome predicts a uni-directional relationship that runs from environmental degradation to globalization, and a one-way causality from globalization to per capita gross domestic prod- uct. Also, a uni-directional causal relationship was observed from natural resources to glob- alization. Based on the outcome, the study recommends that investment in clean technologies should be given high precedence, and since these greener technologies are capital intensive, there is a need for the provision of adequate finance to the private sector to procure these technologies as these would help to alleviate the challenge of degradation of the environment, and increase the value of the environment in the SANE nations.