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Harnessing digitalization to enhance private finance in resource-rich industries

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  • Lei, Yuyan

Abstract

Private investment, particularly in the fossil fuels industry, plays a crucial role in the sustainability puzzle for many countries. This study investigates the impact of digital innovation on private investment in resource-rich sectors, specifically fossil fuels, using data from 25 high-income countries between 2000 and 2022. The findings of CS-ARDL technique reveal that a 1% increase in the ICT development index leads to a short-term decrease of 0.34% in green deployment but a long-term increase of 0.60% in private investment. Additionally, the relationship between CO2 emissions and private investment in fossil fuels shows a short-term decline of 0.19%, followed by a long-term increase of 0.40%. While foreign direct investment (FDI) initially has a negative effect, it later contributes to technological advancements. Factors such as trade openness and patent registrations also facilitate private investment. The study recommends policies to promote digital technology adoption, public-private partnerships, information sharing, and support for research and development initiatives to drive sustainable investment.

Suggested Citation

  • Lei, Yuyan, 2025. "Harnessing digitalization to enhance private finance in resource-rich industries," Resources Policy, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:jrpoli:v:101:y:2025:i:c:s0301420724007384
    DOI: 10.1016/j.resourpol.2024.105371
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    Keywords

    Resource-rich industries; Private sustainable investment; Digital progress; Resource transition;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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