IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v82y2023ics0301420723001587.html
   My bibliography  Save this article

Does Geopolitical risk drive natural resources extraction globally? A Case of Global

Author

Listed:
  • Zhang, Yi
  • Zhang, Leilei
  • Yu, Hang
  • Tu, Yanhong

Abstract

Debate on the natural resources is been quite extensive in previous decades while the influence of total natural resources has been sidelined, whereas the impact of many intrinsic factors involve in the driving of natural resources higher or lower presented but not analyzed globally. Therefore, this study aims to investigate the impact of geopolitical risk on the total natural resources with the controlled variables i.e. financial development, renewable energy and trade from 1986 to 2021. Advanced econometric approaches are considered for the study such as for the unit root properties determination in the data, we use ADF-GLS, to examine the long run cointegration between dependent and independent variables, we have used Bayer-Hanck cointegration approach, while the novel methods of moments of quantile regression (MMQR) is employed for long-term impact of variables on the dependent variable and for the robustness check, we have employed bootstrap quantile regression. The empirical findings of the study divulges that geopolitical risk have significant negative impact on the total natural resources across quantiles while the geopolitical risk is insignificant in the lower quantiles because of the precautionary measures countries take to fulfill its demands from natural resources. The results also concluded positive impact of trade on the natural resources while this study recorded negative influence of renewable energy and financial development on the total natural resource across all quantiles. BSQR approach has confirmed the validity of the results of MMQR approach. The study implies that practitioners and scholars should focus on the stability of the regions by devising policies of political harmony and friendly nations.

Suggested Citation

  • Zhang, Yi & Zhang, Leilei & Yu, Hang & Tu, Yanhong, 2023. "Does Geopolitical risk drive natural resources extraction globally? A Case of Global," Resources Policy, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:jrpoli:v:82:y:2023:i:c:s0301420723001587
    DOI: 10.1016/j.resourpol.2023.103450
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723001587
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.103450?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wang, Weiwei & Gao, Pengpeng & Wang, Jiahaoran, 2023. "Nexus among digital inclusive finance and carbon neutrality: Evidence from company-level panel data analysis," Resources Policy, Elsevier, vol. 80(C).
    2. Saâdaoui, Foued & Ben Jabeur, Sami & Goodell, John W., 2022. "Causality of geopolitical risk on food prices: Considering the Russo–Ukrainian conflict," Finance Research Letters, Elsevier, vol. 49(C).
    3. Phuc Canh, Nguyen & Trung Thong, Nguyen, 2020. "Nexus between financialisation and natural resources rents: Empirical evidence in a global sample," Resources Policy, Elsevier, vol. 66(C).
    4. Baz, Khan & Cheng, Jinhua & Xu, Deyi & Abbas, Khizar & Ali, Imad & Ali, Hashmat & Fang, Chuandi, 2021. "Asymmetric impact of fossil fuel and renewable energy consumption on economic growth: A nonlinear technique," Energy, Elsevier, vol. 226(C).
    5. Zheng, Li & Yuan, Ling & Khan, Zeeshan & Badeeb, Ramez Abubakr & Zhang, Leilei, 2023. "How G-7 countries are paving the way for net-zero emissions through energy efficient ecosystem?," Energy Economics, Elsevier, vol. 117(C).
    6. Machado, José A.F. & Santos Silva, J.M.C., 2019. "Quantiles via moments," Journal of Econometrics, Elsevier, vol. 213(1), pages 145-173.
    7. Guan, Jialin & Kirikkaleli, Dervis & Bibi, Ayesha & Zhang, Weike, 2020. "Natural resources rents nexus with financial development in the presence of globalization: Is the “resource curse” exist or myth?," Resources Policy, Elsevier, vol. 66(C).
    8. Dario Caldara & Matteo Iacoviello, 2022. "Measuring Geopolitical Risk," American Economic Review, American Economic Association, vol. 112(4), pages 1194-1225, April.
    9. Liu, Wenjuan & Agusdinata, Datu B. & Eakin, Hallie & Romero, Hugo, 2022. "Sustainable minerals extraction for electric vehicles: A pilot study of consumers’ perceptions of impacts," Resources Policy, Elsevier, vol. 75(C).
    10. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, January.
    11. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
    12. Sheng Xu & Haonan Dong, 2023. "Green Finance, Industrial Structure Upgrading, and High-Quality Economic Development–Intermediation Model Based on the Regulatory Role of Environmental Regulation," IJERPH, MDPI, vol. 20(2), pages 1-23, January.
    13. Zhang, Hongli & Shen, Lei & Zhong, Shuai & Elshkaki, Ayman, 2020. "Coal resource and industrial structure nexus in energy-rich area: The case of the contiguous area of Shanxi and Shaanxi Provinces, and Inner Mongolia Autonomous Region of China," Resources Policy, Elsevier, vol. 66(C).
    14. Zaidi, Syed Anees Haider & Wei, Zixiang & Gedikli, Ayfer & Zafar, Muhammad Wasif & Hou, Fujun & Iftikhar, Yaser, 2019. "The impact of globalization, natural resources abundance, and human capital on financial development: Evidence from thirty-one OECD countries," Resources Policy, Elsevier, vol. 64(C).
    15. Michail Nektarios A. & Melas Konstantinos D., 2022. "Geopolitical Risk and the LNG-LPG Trade," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 28(3), pages 243-265, September.
    16. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    17. Dogan, Eyup & Majeed, Muhammad Tariq & Luni, Tania, 2021. "Analyzing the impacts of geopolitical risk and economic uncertainty on natural resources rents," Resources Policy, Elsevier, vol. 72(C).
    18. Su, Chi-Wei & Khan, Khalid & Umar, Muhammad & Zhang, Weike, 2021. "Does renewable energy redefine geopolitical risks?," Energy Policy, Elsevier, vol. 158(C).
    19. Auty, R. & Warhurst, A., 1993. "Sustainable development in mineral exporting economies," Resources Policy, Elsevier, vol. 19(1), pages 14-29, March.
    20. Naif Alsagr & Stefan F. Van Hemmen Almazor, 2020. "Oil Rent, Geopolitical Risk and Banking Sector Performance," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 305-314.
    21. Li, Jiaman & Dong, Kangyin & Wang, Kun & Dong, Xiucheng, 2023. "How does natural resource dependence influence carbon emissions? The role of environmental regulation," Resources Policy, Elsevier, vol. 80(C).
    22. Peter Boswijk, H., 1994. "Testing for an unstable root in conditional and structural error correction models," Journal of Econometrics, Elsevier, vol. 63(1), pages 37-60, July.
    23. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    24. Danish, & Ulucak, Recep, 2021. "A revisit to the relationship between financial development and energy consumption: Is globalization paramount?," Energy, Elsevier, vol. 227(C).
    25. Pan, Kai & Cheng, Chengping & Kirikkaleli, Dervis & Genç, Sema Yılmaz, 2021. "Does financial risk and fiscal decentralization curb resources curse hypothesis in China? Analyzing the role of globalization," Resources Policy, Elsevier, vol. 72(C).
    26. Asif, Muhammad & Khan, Khan Burhan & Anser, Muhammad Khalid & Nassani, Abdelmohsen A. & Abro, Muhammad Moinuddin Qazi & Zaman, Khalid, 2020. "Dynamic interaction between financial development and natural resources: Evaluating the ‘Resource curse’ hypothesis," Resources Policy, Elsevier, vol. 65(C).
    27. Khan, Zeeshan & Badeeb, Ramez Abubakr & Nawaz, Kishwar, 2022. "Natural resources and economic performance: Evaluating the role of political risk and renewable energy consumption," Resources Policy, Elsevier, vol. 78(C).
    28. Ahmet Koseoglu & Ali Gokhan Yucel & Recep Ulucak, 2022. "Green innovation and ecological footprint relationship for a sustainable development: Evidence from top 20 green innovator countries," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 976-988, October.
    29. Khan, Zeeshan & Hossain, Mohammad Razib & Badeeb, Ramez Abubakr & Zhang, Changyong, 2023. "Aggregate and disaggregate impact of natural resources on economic performance: Role of green growth and human capital," Resources Policy, Elsevier, vol. 80(C).
    30. Ulucak, Recep & Danish, & Ozcan, Burcu, 2020. "Relationship between energy consumption and environmental sustainability in OECD countries: The role of natural resources rents," Resources Policy, Elsevier, vol. 69(C).
    31. Khan, Zeeshan & Hussain, Muzzammil & Shahbaz, Muhammad & Yang, Siqun & Jiao, Zhilun, 2020. "Natural resource abundance, technological innovation, and human capital nexus with financial development: A case study of China," Resources Policy, Elsevier, vol. 65(C).
    32. Floros Flouros & Victoria Pistikou & Vasilios Plakandaras, 2022. "Geopolitical Risk as a Determinant of Renewable Energy Investments," Energies, MDPI, vol. 15(4), pages 1-21, February.
    33. Christian Bayer & Christoph Hanck, 2013. "Combining non-cointegration tests," Journal of Time Series Analysis, Wiley Blackwell, vol. 34(1), pages 83-95, January.
    34. Bouoiyour, Jamal & Selmi, Refk & Hammoudeh, Shawkat & Wohar, Mark E., 2019. "What are the categories of geopolitical risks that could drive oil prices higher? Acts or threats?," Energy Economics, Elsevier, vol. 84(C).
    35. Redmond, Trumel & Nasir, Muhammad Ali, 2020. "Role of natural resource abundance, international trade and financial development in the economic development of selected countries," Resources Policy, Elsevier, vol. 66(C).
    36. Yulan Lv & Yumeng Pang & Buhari Doğan, 2022. "The role of Chinese fiscal decentralization in the governance of carbon emissions: perspectives from spatial effects decomposition and its heterogeneity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(3), pages 635-668, June.
    37. Wen, Jun & Mughal, Nafeesa & Kashif, Maryam & Jain, Vipin & Ramos Meza, Carlos Samuel & Cong, Phan The, 2022. "Volatility in natural resources prices and economic performance: Evidence from BRICS economies," Resources Policy, Elsevier, vol. 75(C).
    38. Olanipekun, Ifedolapo Olabisi & Alola, Andrew Adewale, 2020. "Crude oil production in the Persian Gulf amidst geopolitical risk, cost of damage and resources rents: Is there asymmetric inference?," Resources Policy, Elsevier, vol. 69(C).
    39. Liu, Qiang & Zhao, Zhongwei & Liu, Yiran & He, Yao, 2022. "Natural resources commodity prices volatility, economic performance and environment: Evaluating the role of oil rents," Resources Policy, Elsevier, vol. 76(C).
    40. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pan, Lijun & Wang, Yangjie & Sun, Xiaofei & Sadiq, Muhammad & Dagestani, Abd Alwahed, 2023. "Natural resources: A determining factor of geopolitical risk in Russia? Revisiting conflict-based perspective," Resources Policy, Elsevier, vol. 85(PA).
    2. Canepa, Alessandra & Zanetti Chini, Emilio & Alqaralleh, Huthaifa, 2023. "Modelling and Forecasting Energy Market Cycles: A Generalized Smooth Transition Approach," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202318, University of Turin.
    3. Xiaonan Zhao & Xingyi Duan & Yen-Chiang Chang, 2023. "The Impact of War Conflict on Sustainable Shipping: Conference Report," Sustainability, MDPI, vol. 15(16), pages 1-11, August.
    4. Lee, Chien-Chiang & Lou, Runchi & Wang, Fuhao, 2023. "Geopolitical risk and the sustainable utilization of natural resources: Evidence from developing countries," Resources Policy, Elsevier, vol. 85(PA).
    5. Halkos, George E. & Aslanidis, Panagiotis – Stavros C., 2023. "Sustainable energy development in an era of geopolitical multi-crisis. Applying productivity indices within institutional framework," Resources Policy, Elsevier, vol. 85(PB).
    6. Kai‐Hua Wang & Zu‐Shan Wang & Hong‐Wen Liu & Xin Li, 2023. "Economic policy uncertainty and geopolitical risk: evidence from China and Southeast Asia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 37(2), pages 96-118, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gong, Qinyi & Ying, Limeng & Dai, Jiapeng, 2023. "Green finance and energy natural resources nexus with economic performance: A novel evidence from China," Resources Policy, Elsevier, vol. 84(C).
    2. Wang, Yong & Li, Fang & Dou, Jiali, 2023. "Revisiting resources allocation for slow-moving economies: A way forward for low-income economies," Resources Policy, Elsevier, vol. 82(C).
    3. Wang, Shubin & Wang, Tingting & Li, Jiabao & Zhao, Erlong, 2023. "Resource curse hypothesis in COP26 perspective: Access to clean fuel technology and electricity from renewable energy," Resources Policy, Elsevier, vol. 82(C).
    4. Zhang, Meng-Chen & Lin, Chun-Yu & Wei, Ying, 2023. "Natural resources exploration, efficiency of energy resources and financial development: Resources sector analysis via least square with structural breaks," Resources Policy, Elsevier, vol. 85(PA).
    5. Wang, Zhen & Hu, Difei & Sami, Fariha & Uktamov, Khusniddin Fakhriddinovich, 2023. "Revisiting China's natural resources-growth-emissions nexus: Education expenditures and renewable energy innovation," Resources Policy, Elsevier, vol. 85(PA).
    6. Chen, Fu & Xu, Jie & Zhang, Weiwei & Wei, Bowen & Li, Tingting, 2023. "Capital formation and natural resources extraction: A source of sustainable development or a curse for the economy?," Resources Policy, Elsevier, vol. 85(PB).
    7. Xu, Yongfeng & Zhao, Xia, 2023. "Financial market risk, technology and natural resources nexus: Evidence from China," Resources Policy, Elsevier, vol. 81(C).
    8. Chen, Zhiguo & Gao, Wei & Zafar, Quratulain & Dördüncü, Hazar, 2023. "Natural resources extraction and geopolitical risk: Examining oil resources extraction in China," Resources Policy, Elsevier, vol. 85(PA).
    9. Li, Shanshan & Long, Fang & Long, Litao, 2022. "Resources curse and sustainable development revisited: Evaluating the role of remittances for China," Resources Policy, Elsevier, vol. 79(C).
    10. Wang, Guoyu & Gu, Xiao & Shen, Xi & Uktamov, Khusniddin Fakhriddinovich & Ageli, Mohammed Moosa, 2023. "A dual risk perspective of China's resources market: Geopolitical risk and political risk," Resources Policy, Elsevier, vol. 82(C).
    11. Gokmenoglu, Korhan K. & Rustamov, Bezhan, 2022. "The role of the natural resource abundance in the short and long run: The case of the Kingdom of Saudi Arabia," Resources Policy, Elsevier, vol. 77(C).
    12. Olatunji Abdul Shobande & Joseph Onuche Enemona, 2021. "A Multivariate VAR Model for Evaluating Sustainable Finance and Natural Resource Curse in West Africa: Evidence from Nigeria and Ghana," Sustainability, MDPI, vol. 13(5), pages 1-15, March.
    13. Gu, Xiao & Badeeb, Ramez Abubakr & Ali, Shahid & Khan, Zeeshan & Zhang, Changyong & Uktamov, Khusniddin Fakhriddinovich, 2023. "Nonlinear impact of natural resources and risk factors on the U.S. economic growth," Resources Policy, Elsevier, vol. 82(C).
    14. Guan, Jialin & Kirikkaleli, Dervis & Bibi, Ayesha & Zhang, Weike, 2020. "Natural resources rents nexus with financial development in the presence of globalization: Is the “resource curse” exist or myth?," Resources Policy, Elsevier, vol. 66(C).
    15. Ma, Yubo & Wang, Fei, 2023. "Dutch disease via remittances and natural resources: A perspective of global economy," Resources Policy, Elsevier, vol. 80(C).
    16. Ding, Tao & Li, Hao & Tan, Ruipeng & Zhao, Xin, 2023. "How does geopolitical risk affect carbon emissions?: An empirical study from the perspective of mineral resources extraction in OECD countries," Resources Policy, Elsevier, vol. 85(PB).
    17. Liu, Bailu & Tian, Jilin, 2023. "Natural resources led innovation: Employing structural break approach to explore USA's natural resources sector," Resources Policy, Elsevier, vol. 85(PA).
    18. Khan, Zeeshan & Hossain, Mohammad Razib & Badeeb, Ramez Abubakr & Zhang, Changyong, 2023. "Aggregate and disaggregate impact of natural resources on economic performance: Role of green growth and human capital," Resources Policy, Elsevier, vol. 80(C).
    19. Zhang, Ziwei & Zhang, Chao, 2023. "Revisiting the importance of forest rents, oil rents, green growth in economic performance of China: Employing time series methods," Resources Policy, Elsevier, vol. 80(C).
    20. Wang, Zhe & Teng, Yin-Pei & Wu, Shuzhao & Liu, Yuxiang & Liu, Xianchang, 2023. "Geopolitical risk, financial system and natural resources extraction: Evidence from China," Resources Policy, Elsevier, vol. 82(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:82:y:2023:i:c:s0301420723001587. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.