The analysis of ‘Financial Resource Curse’ hypothesis for developed countries: Evidence from asymmetric effects with quantile regression

Doğan, Eyüp; Altınöz, Buket; Tzeremes, Panayiotis

doi:10.1016/j.resourpol.2020.101773

Cited by 79 publications

(27 citation statements)

References 66 publications

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“…The study is inspired by the scholarly work of Kassouri et al ( 2020 ), Asif et al ( 2020 ), and Dogan et al ( 2020 ), as these studies confined their resulting findings in the context of financial development and natural resource abundance (including oil resources) in different economic settings. The study extended their concepts under the COVID-19 pandemic to analyze the financial resource (oil) curse hypothesis in an independent country panel.…”

Section: Data Sources and Methodological Frameworkmentioning

confidence: 99%

Financial development, oil resources, and environmental degradation in pandemic recession: to go down in flames

Anser

Khan

Zaman

et al. 2021

Environ Sci Pollut Res

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The novel coronavirus disease-2019 (COVID-19) is a deadly disease that increases global healthcare sufferings. Further, it affects the financial and natural resource market simultaneously, as both are considered complementary goods. The volatility in the oil prices deteriorates the global financial market to substantiate the “financial resource (oil) curse” hypothesis primarily filled with earlier studies. In contrast, this study moved forward and extended the given relationship during the COVID-19 pandemic in a panel of 81 different countries. The study’s main objective is to examine the volatility in the domestic credit provided to the private sector due to oil shocks and the COVID-19 pandemic across countries. The study is essential to assess the healthcare vulnerability in the COVID-19 pandemic, leading to the damage of financial stability, causing deterioration in the oil rents to affect the global sustainability agenda. The study employed statistical techniques to get sound inferences of the parameter estimates, including robust least squares regression, seemingly unrelated regression, and innovation accounting matrix to get a variable estimate at the level and inter-temporal framework. The results confirmed the U-shaped relationship between oil rents and financial development during the COVID-19 pandemic. Thus, it verifies the “financial resource (oil) curse” hypothesis at the initial stage of the COVID-19 pandemic. Later down, it supports the capital market when economies are resuming their economic activities and maintaining the SOPs to restrain coronavirus at a global scale. The qualitative assessment confirmed the negative effect of financial development and oil shocks on environmental quality during the pandemic crisis. The innovation accounting matrix shows that the COVID-19 pandemic will primarily be the main factor that intervenes in the relationship between oil rents and financial development, which proceed towards the “resource curse” hypothesis during the following years’ time period. Therefore, the need for long-term economic policies is highly desirable to support the financial and resource market under the suggested guidelines of restraining coronavirus worldwide.

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Section: Data Sources and Methodological Frameworkmentioning

confidence: 99%

Financial development, oil resources, and environmental degradation in pandemic recession: to go down in flames

Anser

Khan

Zaman

et al. 2021

Environ Sci Pollut Res

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“…Their findings indicate that the stringency of environmental policy and institutional quality positively affects the firm's technological diffusion process. Sinha and Sengupta (2019), Dogan et al (2020) and Awan (2020), both through empirical investigation and policy implications, suggest that environmental knowledge spillover, technological diffusion, innovativeness and appropriate policy design can support the greening of energy use.…”

Section: Literature Reviewmentioning

confidence: 99%

Do macroeconomic uncertainty and financial development cause environmental degradation? Evidence from an emerging economy

Rakshit

Neog

2021

IJSE

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PurposeThe main purpose of this paper is to empirically investigate the effect of macroeconomic uncertainty on environmental degradation in India over the period 1971–2016. Additionally, this paper considers the role of financial development, energy consumption intensity and economic growth in explaining the variation of environmental degradation in India.Design/methodology/approachThe authors applied the power generalized autoregressive conditional heteroskedasticity model to measure inflation volatility and used it as a proxy for macroeconomic uncertainty. From a methodological perspective, the authors employ the autoregressive distributive lag bound testing model to establish the long-run equilibrium association between the variables. The Toda–Yamamoto causality approach has been used to examine the direction of causality between the variables.FindingsFindings suggest that macroeconomic uncertainty exerts a positive effect on carbon emissions, indicating that higher inflation volatility, as a proxy for macroeconomic uncertainty, hinders India's environmental quality. Financial development, economic growth and energy consumption intensity have also adversely impacted environmental quality.Practical implicationsThe negative association between macroeconomic uncertainty and environmental degradation calls for some stringent policy actions. While formulating policies to promote growth and maintain stability, policymakers and government stakeholders should take into account the environmental effects of macroeconomic policies. There is a need to implement more environmental-friendly technologies in the financial sector that could reduce carbon emission.Originality/valueTo the best of the authors' knowledge, this study is the first that considers the role of macroeconomic uncertainty along with financial development and energy intensity in an emerging economy like India.

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“…Khan et al [61] confirmed that financial development hurts the resource commodity market that required stringent government regulations to control commodity prices. Dogan et al [62] found a positive impact of natural resource rents on financial development. Khan et al [63] argued that financial development, population density, and carbon pricing decreases coal, mineral, and oil rents.…”

Section: Resultsmentioning

confidence: 98%

Ecofeminism and Natural Resource Management: Justice Delayed, Justice Denied

2021

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Women have a right to excel in all spheres of activity. However, their roles are mainly confined in the resource extraction industry due to masculinity bias. African women are considered exemplary cases where women have low access to finance and economic opportunities to progress in the natural resource industry. This study examines the role of women’s autonomy in mineral resource extraction by controlling ecological footprints, financial development, environmental degradation, economic growth, and changes in the general price level in the Democratic Republic of the Congo data from 1975–2019. The autoregressive distributed lag estimates show that in the short-run, women’s autonomy decreases mineral resource rents; however, this result disappears in the long-run and the positive role of women’s autonomy in increasing resource capital is confirmed. Ecological footprints are in jeopardy from saving mineral resources both in the short- and long-term. Financial development negatively impacts mineral resource rents, while women’s access to finance supports the mineral resource agenda. The positive role of women in environmental protection has led to increased mineral resource rents in the short- and long-term. Women’s social and economic autonomy increases mineral resource rents in the short-term, while it has evaporated in the long-term. The Granger causality has confirmed the unidirectional linkages running from women’s green ecological footprints, access to finance, and women participating in environmental protection to mineral resource rents in a country. The variance decomposition analysis has shown that women’s economic autonomy and access to finance will exert more significant variance shocks to mineral resource rents over the next ten years’ period. The results conclude the positive role of women’s freedom in the mineral resource sustainability agenda. Thus, there is a high need to authorize women through access to finance and economic decisions to restore natural resource capital nationwide.

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The analysis of ‘Financial Resource Curse’ hypothesis for developed countries: Evidence from asymmetric effects with quantile regression

Cited by 79 publications

References 66 publications

Financial development, oil resources, and environmental degradation in pandemic recession: to go down in flames

Financial development, oil resources, and environmental degradation in pandemic recession: to go down in flames

Do macroeconomic uncertainty and financial development cause environmental degradation? Evidence from an emerging economy

Ecofeminism and Natural Resource Management: Justice Delayed, Justice Denied

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