Nexus between natural resource and economic development: How green innovation and financial inclusion create sustainable growth in BRICS region?

Abstract

Advancement in technology and other methods of production have changed the economic, social, and sociological status of different economies. Considering the sustainability agenda of the United Nations, various sustainable development goals have been achieved, among sustainable economic development is getting remarkable attention in the modern literature. Meanwhile, the nexus between economic development and natural resources has opened new pathways for the presence of the resource curse or resource blessing phenomenon. However, literature have provided contradictory findings while testing for the resource curse in developed and developing economies. This research examines whether sustainable development and natural resources are mutually exclusive under the theoretical foundation of the resource curse using methods of moments quantile regression (MMQR). It further examines the role of technological innovations and financial in BRICS region between 1993 and 2021. The study findings show a significant and negative impact of natural resources on the economic development across all three levels of quantiles (i.e., lower, middle, and higher). Moreover, technological innovations and financial development tend to increase economic development from lower to higher-order quantiles. The impact of technological innovations and financial development shows higher impact at the highest growth quantiles (0.90th). Besides, the results also support that capital formation and industrialization is positively significant influence economic growth. The findings suggest the sustainable utilization of natural resources, technological innovation and strengthening the financial system is imperative for long term growth.