Asymmetric role of natural resources in uplifting the economic status of resource-rich economies

Abstract

The role of natural resources is quite evident in economic progressions. However, the resource-curse phenomenon is widely accepted through a range of empirical evidence in the literature. Hence, this research aims to examine the role of three proxies of natural resource rents (coal, mineral, and oil rents) and ecological innovations in determining economic growth trends during 1995–2021. Initially, it employed slope heterogeneity, cross-sectional dependence, unit root testing, and cointegration tests. Later, it employs the three-panel estimations entitled dynamic ordinary least square, fully modified ordinary least square, and fixed effect ordinary least square estimation for checking the long-term connection between the variables. Finally, the method of moments quantile regression (MMQR) was applied to evaluate the asymmetric trends in economic growth over lower, medium, and higher growth quantiles. The results show that coal rent's impact on economic growth is negatively significant across all the quantiles. However, mineral rents positively accelerate economic progression under medium and higher-order quantiles, while oil rents tend to reflect an insignificant impact across all the quantiles. Ecological innovations show positively significant coefficients under lower, medium, and higher-order quantiles; nevertheless, the coefficient scores vary across all the quantiles. Alternative estimations have confirmed these findings. Based on the empirical findings, a few policy implications and future directions have also been discussed.