Natural resources, decentralized system, financial inclusion and sustainable development: Evidence from top emerging economies with resources abundance

The issue of NRR, whether a curse or a blessing, presents a complex and multifaceted dilemma, yielding varied conclusions for developed and emerging economies. However, few studies have discussed the overview of sustainable development of NRR in emerging nations. Hence, this research studies the linkage between natural resources and economic growth in emerging economies. The study also included the effective role of the financial inclusion index, green innovation, decentralization, and economic risk index in a panel data set covering the period from 2004 to 2019. The research operated various panel methods to analyze the data. These methods included tests for slope heterogeneity and cross-section dependency, as well as the CIPS unit root test to assess the significance of the data at the level or difference. The Westerlund cointegration test was employed to examine long-term cointegration, and a novel MMQR method was used for the primary analysis. Additionally, panel FMOLS and DOLS methods were used as robustness checks. The initial scrutiny revealed the occurrence of heterogeneity and cross-section dependency in the panel data. Furthermore, the results indicated that the variables were stationary when considering their differences, and there was an indication of long-term equilibrium among the variables. The outcomes observed in the research indicate that natural resources are subject to a resource curse in emerging economies where oil and mineral rents negatively influence economic expansion throughout quantiles. Furthermore, financial inclusion and decentralization foster economic expansion while economic risk index and green innovation also have positive effects on economic growth across quantiles. Relevant policies are recommended to channel the resources into the growth sector through the encouraging role of financial inclusion, decentralization, and green innovation while managing the economic risk index.