Sustainable development through digitalization: An exploration of natural resource extraction in China

Abstract

This study investigates the role of natural resource rents and economic growth in the digitalization of China from 1988 to 2021, focusing on the impact of research and development (R&D). The study addressed the research gap in the relationship between digitalization and sustainable development, specifically focusing on the role of R&D. The study employed reliable and robust methods, including Augmented Dickey-Fuller tests, Johansen cointegration, and ARDL estimation. The findings suggest that GDP in China positively impacts digitalization, while natural resource rents show an asymmetrical relationship with digitalization. Additionally, R&D shows an insignificant impact on digitalization in the short term and a low impact in the long term. The robustness checks exhibit similar and robust results to the ARDL estimates, and the Granger causality analysis showed a bi-directional causality association between the variables. The study's implications suggest that pertinent policies are needed to stimulate R&D, natural resources, and economic growth in China to enhance digitalization and promote sustainable development. Policy recommendations include developing human capital and technological capabilities, promoting sustainable natural resource use, and fostering an innovation-friendly environment. This study provides insights into the factors that drive digitalization in China and has implications for policymakers seeking to promote sustainable development.