Mineral resources and intellectual capital: Asymmetrical impacts and sustainable development outcomes

Abstract

The existence and use of natural resources, and the impact that they have on sustainable development is a topic that has received significant attention, with a particular focus on the “resource curse hypothesis.” However, there is limited research that explores the combined role of natural resources and human capital, specifically when it comes to the realm of endogenous sustainable development. This study, therefore, takes into account this research gap, and investigates the interrelationship between natural resources, human capital, and sustainable development, specifically in the context of China. By conducting an advanced econometric analysis, we have examined the influence of oil rents, forest rents, and mineral rents on China's economic growth from the years spanning from 1992 to 2022, while considering the control variables such as foreign direct investment (FDI) and research and development (R&D) expenditures. Our findings have revealed an asymmetric impact of mineral rents and oil rents on economic growth, while forest rents have shown a positive and considerable influence as well. This essentially indicates the presence of beneficial effects from forest resources. Moreover, we have also observed a positive association between human capital and economic expansion. in addition to this, expenditures such as those pertaining to FDI and R&D are shown to stimulate economic growth in China. Furthermore, this study also finds bi-directional causality between oil rents, FDI, and human capital, while forest rents, mineral rents, and R&D expenditures show an uni-directional causal relationship with economic growth in China. Our study contributes towards the understanding of the complex dynamics that exist between natural resources, human capital, and sustainable development in China. These findings have policy implications for sustainable development through resource management, human capital development, and technological innovation.