Natural resources perspective of economic performance: Streamlining mineral resources as a path to sustainable development

Abstract

In the scholarly discussion concerning the significance of natural resources in economic development, particularly in the era of digitalization, the data is still inconclusive. The present study focuses on the impact of digitalization and natural resource components on China's economic output. Using the expanded dataset from 1987 to 2022, this analysis also takes the effects of trade and energy efficiency into account. Due to the mixed order of integration, this research employs the ARDL bound testing technique to check the equilibrium condition between the variables in both the short-run and long-run. The result of the effect demonstrates that commerce and energy efficiency are significant long- and short-term contributors to China's economic production. But digitization is the primary impediment to achieving continuous economic development. On the other hand, it has been discovered that the influence of natural resources (mineral and natural gas rentals) is notably favorable in the short run but changes to a negative state over time. Such impact helps to explain China's resource curse. The long-term robustness of these estimates is supported by four robust estimators. The causality analysis revealed a significant unidirectional and bidirectional causal relationship between the variables. Based on the empirical data, this study suggests a variety of policies that might help the country achieve sustainable economic development.