Natural resources extraction and sustainable development: Linear and non-linear resources curse hypothesis perspective for high income countries

Abstract

The Natural Resources Reserves are essential components of the economies of not just all of the nations of the world but also of the vast majority of those nations, the majority of which get a considerable advantage from their resources. High income countries are characterized by their diversified economies and their relatively low dependence on natural resources for government revenue. Resource extraction often generates significant rent-seeking behavior and corruption, which can result in inefficient allocation of resources and stifle economic growth. Hence, this study examines the nexus between TNRs and GDP for 31 high income nations for the period of 1990–2020. The economies used as examples in this research are fortunate to have access to a significant natural resource, which helps to improve the countries' long-term growth. The quantile regression method is utilized in this study so that the model may be estimated. This study employs the quantile regression method to examine the relationship between TNRs, and economic growth in the presence of control variables. The findings show that resource curse hypothesis is valid in case of high-income countries. As a consequence of this, the conclusion that may be reached is that natural resource rent is detrimental to the expansion of the economy in high income countries.