Resources curse and sustainable development revisited: Evaluating the role of remittances for China

Abstract

The controversial debate regarding the association between natural resources and sustainability fuels the literature strand to assess their true connection. In this sense, this study revisited natural resources and sustainable development in the case of China from 1982 to 2020. Besides, this study examined the role of remittances, fossil fuel consumption, and technological innovation in sustainable development. Using novel time series specifications, this study validates the stationarity and the existence of a long-run equilibrium relationship between these variables. The irregular distribution of the data forces this study to use the novel method of moment quantile regression – an effective approach that tackles the non-normality issue of data. The empirical results illustrate that natural resources adversely affect sustainable development in the country, which is evident in the resource curse paradox in China. On the other hand, fossil fuel consumption and technological innovation are significant factors of the country's sustainable development. Unlike these variables, remittances have an adverse yet insignificant role in the country's sustainable development. These estimates are found robust as validated by another non-parametric (Bootstrap quantile regression) approach. Based on the empirical findings, this study suggests the sustainable use of natural resources exploitation, productive utilization of remittances, and improve investment in the technological innovation via promoting research and development in the country.