How do financial development and ICT moderate financial resource curse hypothesis in developing countries?

Abstract

Sustainable resource utilization and economic prosperity are one of the ultimate goals worldwide; mainly, resource-abundant emerging countries are more concerned with identifying the factors of sustainable development in confronting the resource curse. Over the last two decades, tremendous progression in information and communication technology (ICT) and financial development (FD) has triggered economic prosperity. In this aspect, the study evaluates the dynamic impact of natural resources (NR), ICT, and FD on economic growth in eleven developing economies from 1990 to 2021. Moreover, the study confirms the presence of a curse paradox or blessing associated with NR by employing a cross-section augmented distributed lag (CS-ARDL) estimator after resolving the cross-section dependency and heterogeneity issues. The findings exhibit that NR is inversely associated with economic development, confirming the resource curse problem in these economies, while FD and ICT encourage sustainable growth. Manifestly, the indirect moderating contribution of ICT and FD reveals that when resource-abundant countries are embodied with a well-developed financial sector and ICT infrastructure, resources are efficiently consumed, leading to inclusive economic progress. In addition, the identical outcomes are echoed by utilizing the alternative panel techniques. Overall, the study recommends valuable policy strategies in resource utilization for sustainable development.