What happened in COVID to conflict: Re-examination of financial inclusion and green development nexus in China natural resource sector

Abstract

This study aims to provide insights into the effects of COVID-19 pandemic on the intersection of financial inclusion and green development in the natural resource sector. Specifically, this study explores the dynamic relationship between financial inclusion, green development in the natural resource sector, with a focus on China. Using cross-sectional data from 3 natural resource exploitation industries in China, we employ a panel cointegration approach to analyze the relationship between financial inclusion and green development. The dataset covers the pre-COVID and COVID-19 periods, allowing us to examine the impact of the pandemic on this nexus. Our findings shed light on the role of financial inclusion in promoting sustainable practices within the natural resource sector during times of crisis. We observe that during the COVID-19 pandemic, there has been a heightened focus on the interplay between financial inclusion and green development. This is particularly evident in the context of China's natural resource exploitation industries, where initiatives to enhance financial inclusion have been instrumental in driving sustainable practices and mitigating the adverse environmental impacts of resource extraction. Furthermore, our research underscores the importance of aligning financial inclusion strategies with broader environmental objectives, especially in light of the upcoming Conference of the Parties (COP27) and its focus on global climate action. By leveraging financial inclusion measures to facilitate the adoption of green technologies and practices, the natural resource sector can make significant progress towards sustainable development. This study contributes to the existing literature by offering empirical evidence of the linkages between financial inclusion, green development, and the natural resource sector in the context of China. Our findings provide valuable insights for policymakers, industry practitioners, and stakeholders seeking to enhance sustainability and promote inclusive growth within the natural resource sector.