Balancing natural resources, urbanization, and innovation for sustainable economic recovery in Asia

Abstract

Asia faces significant obstacles in its pursuit of economic development and social inclusion because of its reliance on natural resource extraction. Using data from 2003 to 2019, this study tests the auto-correlation of the connections among economic growth, business structure, and resource use effectiveness. We also assess the moderating roles of education, financial freedom, and urbanization. Across the different regional economic blocs, we find that the effect of natural resources on GDP growth is non-linear and variable. This result demonstrates that trade pacts reduce the effect of natural resources on the financial development of Asian countries. The results of the auto-correlation tests support the idea that distributional heterogeneity exists in the relationship between rent from natural resources and economic recovery. Therefore, people in Asian countries responsible for financial policies must use the gains from natural resource extraction to diversify their economies and create more jobs to achieve Goals 8 and 10 of the Sustainable Development Agenda.