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Natural resources extraction and financial inclusion: Linear and non-linear effect of natural resources on financial sector

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  • Badeeb, Ramez Abubakr
  • Wang, Bo
  • Zhao, Jun
  • Khan, Zeeshan
  • Uktamov, Khusniddin Fakhriddinovich
  • Zhang, Changyong

Abstract

Unlike most other research that has focused more on the linear impact of natural resources on economic performance, the current study intends to examine the linear and non-linear impact of natural resource exploitation on multidimensional financial inclusion that considers the availability, accessibility, and usage of financial inclusion. Based on data from certain OECD economies from 2004 to 2020, the cross-sectional augmented ARDL (CS-ARDL) test reveals that natural resources have a negative linear and non-linear influence on financial inclusion, contrary to the hypothesis that they follow an inverted U-shaped curve, while the squared term of the effect is less negative than the linear term. It is additionally shown that globalisation and renewable energy consumption increase financial inclusion. Moreover, the impact of political risk and financial risk on financial inclusion is negative, while that of economic risk is positive. The study recommends promoting natural resources by channeling its impact into the real sector of the economy and encouraging renewable energy consumption with globalization.

Suggested Citation

  • Badeeb, Ramez Abubakr & Wang, Bo & Zhao, Jun & Khan, Zeeshan & Uktamov, Khusniddin Fakhriddinovich & Zhang, Changyong, 2023. "Natural resources extraction and financial inclusion: Linear and non-linear effect of natural resources on financial sector," Resources Policy, Elsevier, vol. 85(PA).
    • Handle: RePEc:eee:jrpoli:v:85:y:2023:i:pa:s0301420723005378
    DOI: 10.1016/j.resourpol.2023.103826
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