Resource-richness, technological innovation, and sustainable development: Evidence from emerging economies

Abstract

Natural resources are an important element of the economy's growth and sustainable development. The contradiction between scholars regarding resource-blessings and resource-curse motivated this study to examine their true relationship. This study analyzes the influence of natural resource rents, technological innovation, foreign direct investment, gross fixed capital formation, and sustainable development (GDP) in emerging seven economies. Covering the period 1990 to 2020, this study uses various panel data approaches, such as slope heterogeneity, cross-section dependence, and the second generation unit root test. The examined results asserted that the long-run equilibrium relationship exists between the variables. For long-run estimates, this study employs the novel method of moments quantile regression, which validates resource curse in emerging economies. On the other hand, technological innovation, foreign direct investment, and gross fixed capital formation are substantial factors of sustainable development. These findings are robust as bidirectional causal nexus exists between the explanatory variables and the GDP. Based on findings, this study suggests the sustainable use of natural resources, investment in technology, and encouragement of foreign direct investment and gross fixed capital formation to attain sustainable development.