Revenue sources of natural resources rents and its impact on sustainable development: Evidence from global data

Abstract

This study investigates the influence of natural resource rents on global sustainable development. Also, the impact of energy productivity and the development of environmental-related technological innovation is investigated from 1990 to 2020. This study uses various time-series approaches, where the variables are found to be cointegrated. Parametric approaches, such as the Fully-Modified Ordinary Least Square, Dynamic Ordinary Least Square, and Canonical Cointegration Regression, are used. The empirical findings asserted that natural resources asymmetrically influence sustainable development. Where mineral rents and natural gas rents positively and forest rents adversely affect sustainable development. Energy productivity is a significant factor in sustainable development, whereas the development of environmental-related technologies positively but insignificantly affects global sustainable development. The pairwise Granger causality test validates the two-way causal association between economic growth (sustainable development) and the variables, including forest rents, mineral rents, natural gas rents, energy productivity, and the development of environmental-related technologies. Following the empirical results, this study suggests policies regarding the sustainable use of natural resource rents, enhancement in energy productivity, and investment in environmental-related technological innovation.