Interlinkages between mineral resources, financial markets, and sustainable energy sources: Evidence from minerals exporting countries

Abstract

The literature on demand and supply of minerals for the global energy transition portrays a potential way to achieve environmental sustainability objectives. This study is an endeavour to this subject by probing the dynamic effects of mineral resources and financial markets on energy transition in the top 20 minerals exporting countries for the period 1980–2020. To visualize the characteristics of developing and developed nations, the sample is further bifurcated into two models, respectively. As preliminary tests, the testing framework includes cross-sectional dependence (CSD), slope heterogeneity, panel unit root, and cointegration approaches. Consequently, cross-sectional ARDL, augmented mean group (AMG), and common corrected effects mean group (CCEMG) estimators are employed to meet the study's goals. The study's empirical results determine that mineral markets impart their role in enhancing the energy transition to accomplish a sustainable future. In contrast, financial markets support the inverse relationship with sustainable energy in both the short- and long-run. Renewable energy, economic growth, and foreign direct investment encourage cleaner energy while urbanization and carbon emissions intensity bear negatively significant linkages with energy transition. Moreover, developed economies perform prudently to follow the sustainable economic objectives of the Conference of the Parties (COP-26). The findings reported in this research offer essential and useful recommendations and policy implications to accomplish sustainable growth.