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Natural resources, financial technologies, and digitalization: The role of institutional quality and human capital in selected OECD economies

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  • Li, ChangZheng
  • Razzaq, Asif
  • Ozturk, Ilhan
  • Sharif, Arshian

Abstract

This study analyzes the influence of financial technologies, digitalization, institutional quality, and human capital on natural resources rent during 2002–2020 in selected OECD economies. It identifies the diverse impact of selected explanatory variables at three ranges of quantiles (lower, middle, and higher) through the method of moments quantile regression (MMQR) along with the long-run coefficients via fully modified ordinary least squares (FM-OLS), fixed effects OLS, and dynamic ordinary least squares (OLS) regression, respectively. From the initial results, it is inferred that there exists a cross-sectional dependence, heterogeneity in the slope coefficients, panel cointegration, and stationarity in the data. The results show that financial technologies and digitalization reduce the dependency on natural resources. Likewise, human development and institutional quality lead to lower natural resources dependency; however, their marginal impact varies across different quantiles. The results show that financial technologies and digitalization effects are stronger at higher quantiles. Likewise, the influence of digitalization on natural resource rent is highly significant and negative at the highest quantile. These results offer valuable policy recommendations.

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  • Li, ChangZheng & Razzaq, Asif & Ozturk, Ilhan & Sharif, Arshian, 2023. "Natural resources, financial technologies, and digitalization: The role of institutional quality and human capital in selected OECD economies," Resources Policy, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:jrpoli:v:81:y:2023:i:c:s0301420723000703
    DOI: 10.1016/j.resourpol.2023.103362
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