The impact of natural resources on technology innovation from cross-country panel data: A comparative analysis and policy-level insights

Abstract

The study aims to examine the direct impact of natural resources on technology innovation by considering the critical role of five dimensions of technology innovation (ICT development, R&D activity, skills, industry activity and access to finance). For this purpose, the common correlated effect mean group (CCEMG) estimator is applied to estimate cross-country panel data encompassing 102 countries from 2008 to 2018. Under the global sample, the empirical evidence strongly supports that natural resources hinder ICT development and R&D activity but have a positive impact on industry activity and access to finance, which shows a traceable path of the resource blessing. In addition, for overall technology innovation, ICT development, R&D and industry activity, the resource curse is effectively transformed into a resource blessing in high-income countries, which benefits from the high level of manufacturing, modern services and industrial structure. When considering the chronological evolution, natural resources show a negative effect on overall technology innovation in the first period and a positive effect in the second period in low-income countries. On this basis, challenges and initiatives in three phases are proposed to better achieve resource blessing, including resource regulation, human resource reserve, international trade adjustment, industrial structure transformation and financial investment optimization. Lastly, policy-level insights on the different dimensions of technology innovation are proposed to provide guidance and valuable reference for policymakers.