The impact of natural resource abundance on green economic growth in the belt and road countries: The role of institutional quality

Abstract

Institutional quality is critical to explain differences in the economic benefits of natural resources. To achieve the green development in the Belt and Road countries (BRI countries), it is worth thinking about the role of institutional quality in preventing resource curse. Based on new institutional economics theory, this paper first proposed the affecting mechanism of institutional quality in the relationship between natural resource abundance and green economic growth. Then combined with SBM model and GML index, the level of green economic growth in 48 BRI countries was calculated and further analyzed. Furthermore, panel threshold models were adopted to investigate the role of institutional quality in preventing resource curse and conduct heterogeneous analysis of different income levels. The results indicated that, for BRI countries the resource curse on green economic growth could be eliminated as the institutional quality went above the threshold value. For high-income countries, the promotion effect of natural resource abundance increased significantly when institutional quality was above the threshold value, while for low- and middle-income countries, natural resource curse did significantly exist and turned to be a blessing only when institutional quality was above certain threshold. Therefore, improving institutional quality would be an active way in green economic growth of BRI countries.