Driving sustainable development: Role of institutional quality and future of China's mineral resource management projects

Abstract

The rapid industrial progress in China along with significant dependence on minerals, raises concerns about the influence of its overall reliance on nations’ development trajectory. Moreover, institutional quality also plays an active role in shaping the economic structure of any nation. The study investigates the intricate association among mineral extraction, institutional quality, and economic development in China from 1990 to 2022. For an empirical investigation, the ARDL (Autoregressive distributed lag) co-integration method is employed based on the order of integration of the series defined by the ADF(Augmented Dickey-Fuller) stationarity test. Moreover, CUSUM and CUSUM square (Cumulative sum of square) also confirm the stability of the model. According to the findings mineral rent and mineral exports are found to be positively significant in the short and the long run and increase economic growth. While institutional quality is shown to be positively insignificant in the short term, in the long run, it is shown to have a positive significant effect. Moreover, inflation and population growth are shown to have a positive significant impact in the short term, but trade is found to be insignificant. Lastly, the study intends to suggest policy suggestions based on the results. A country should have a strong institutional setup to ensure sustainable long-term growth.