IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v86y2023ipbs0301420723007857.html
   My bibliography  Save this article

The dynamic relationship between resources, finances, and sustainable development: An in-depth analysis

Author

Listed:
  • Pan, Changchun
  • Yu, Jingxia
  • Huang, Yuzhe
  • Altuntas, Sumeyya

Abstract

The expansion of the economy and the use of natural resources have been identified as the main causes of environmental degradation. As a result, there is a need for sustainable and environmentally-friendly growth. However, the concept of "pollution havens" is becoming increasingly relevant, with businesses relocating to developing countries in search of more lax environmental regulations. This could lead to higher-than-desirable rates of pollution and environmental damage. To address this issue, this study assesses the role of natural resources (NTR), Foreign Direct Investment (FDI), Financial Development (FDT), and Green Finance (GFN) using QARDL analysis. The study found that NTR, FDI, and FDT increased CO2 emissions, while GFN reduced them in the short and long run. The findings provide valuable insights for policymakers, who can use the information to develop policies that promote economic growth while reducing environmental pollution. Additionally, the study highlights the need to prevent businesses from exploiting lax environmental regulations in developing countries. Overall, the findings of this study underscore the importance of balancing economic development and environmental sustainability and call for the prioritization of green initiatives in policy development.

Suggested Citation

  • Pan, Changchun & Yu, Jingxia & Huang, Yuzhe & Altuntas, Sumeyya, 2023. "The dynamic relationship between resources, finances, and sustainable development: An in-depth analysis," Resources Policy, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:jrpoli:v:86:y:2023:i:pb:s0301420723007857
    DOI: 10.1016/j.resourpol.2023.104074
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723007857
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.104074?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. Syed Kumail Abbas Rizvi & Bushra Naqvi & Nawazish Mirza, 2022. "Is green investment different from grey? Return and volatility spillovers between green and grey energy ETFs," Annals of Operations Research, Springer, vol. 313(1), pages 495-524, June.
    2. Cho, Jin Seo & Kim, Tae-hwan & Shin, Yongcheol, 2015. "Quantile cointegration in the autoregressive distributed-lag modeling framework," Journal of Econometrics, Elsevier, vol. 188(1), pages 281-300.
    3. Umar, Muhammad & Mirza, Nawazish & Rizvi, Syed Kumail Abbas & Furqan, Mehreen, 2023. "Asymmetric volatility structure of equity returns: Evidence from an emerging market," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 330-336.
    4. Arik Levinson & M. Scott Taylor, 2008. "Unmasking The Pollution Haven Effect," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(1), pages 223-254, February.
    5. Adnan Safi & Xianrong Yi & Salman Wahab & Yingying Chen & Hassan Hassan, 2021. "CEO overconfidence, firm-specific factors, and systemic risk: evidence from China," Risk Management, Palgrave Macmillan, vol. 23(1), pages 30-47, June.
    6. Muhammad Umar & Xiangfeng Ji & Dervis Kirikkaleli & Muhammad Shahbaz & Xuemei Zhou, 2020. "Environmental cost of natural resources utilization and economic growth: Can China shift some burden through globalization for sustainable development?," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(6), pages 1678-1688, November.
    7. Hayat, Sikandar & Safi, Adnan & Wahab, Salman & Shahzad, Khurram & Chen, Yingying, 2023. "Renewable energy R&D and natural resources: A success story of environmentally friendly financing in OECD economies," Resources Policy, Elsevier, vol. 83(C).
    8. Lan, Jing & Wei, Yiming & Guo, Jie & Li, Qiuming & Liu, Zhen, 2023. "The effect of green finance on industrial pollution emissions: Evidence from China," Resources Policy, Elsevier, vol. 80(C).
    9. Azam, Anam & Rafiq, Muhammad & Shafique, Muhammad & Zhang, Haonan & Yuan, Jiahai, 2021. "Analyzing the effect of natural gas, nuclear energy and renewable energy on GDP and carbon emissions: A multi-variate panel data analysis," Energy, Elsevier, vol. 219(C).
    10. Isaac Akomea-Frimpong & David Adeabah & Deborah Ofosu & Emmanuel Junior Tenakwah, 2022. "A review of studies on green finance of banks, research gaps and future directions," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 12(4), pages 1241-1264, October.
    11. Li, Zongyun & Rizvi, Syed Kumail Abbas & Rubbaniy, Ghulame & Umar, Muhammad, 2021. "Understanding the dynamics of resource curse in G7 countries: The role of natural resource rents and the three facets of financial development," Resources Policy, Elsevier, vol. 73(C).
    12. Claudia Kemfert, 2019. "Green Deal for Europe: More Climate Protection and Fewer Fossil Fuel Wars," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 54(6), pages 353-358, November.
    13. Adnan Safi & Yingying Chen & Abdul Qayyum & Salman Wahab, 2022. "Business strategy, market power, and stock price crash risk: Evidence from China," Risk Management, Palgrave Macmillan, vol. 24(1), pages 34-54, March.
    14. Usman, Muhammad & Balsalobre-Lorente, Daniel & Jahanger, Atif & Ahmad, Paiman, 2022. "Pollution concern during globalization mode in financially resource-rich countries: Do financial development, natural resources, and renewable energy consumption matter?," Renewable Energy, Elsevier, vol. 183(C), pages 90-102.
    15. Mirza, Nawazish & Afzal, Ayesha & Umar, Muhammad & Skare, Marinko, 2023. "The impact of green lending on banking performance: Evidence from SME credit portfolios in the BRIC," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 843-850.
    16. Naqvi, Bushra & Rizvi, Syed Kumail Abbas & Mirza, Nawazish & Umar, Muhammad, 2023. "Financial market development: A potentiating policy choice for the green transition in G7 economies," International Review of Financial Analysis, Elsevier, vol. 87(C).
    17. Wolfgang Keller & Arik Levinson, 2002. "Pollution Abatement Costs and Foreign Direct Investment Inflows to U.S. States," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 691-703, November.
    18. Ayesha Afzal & Ehsan Rasoulinezhad & Zaki Malik, 2022. "Green finance and sustainable development in Europe," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 5150-5163, December.
    19. Rizvi, Syed Kumail Abbas & Naqvi, Bushra & Mirza, Nawazish & Umar, Muhammad, 2022. "Safe haven properties of green, Islamic, and crypto assets and investor's proclivity towards treasury and gold," Energy Economics, Elsevier, vol. 115(C).
    20. Balsalobre-Lorente, Daniel & Shahbaz, Muhammad & Roubaud, David & Farhani, Sahbi, 2018. "How economic growth, renewable electricity and natural resources contribute to CO2 emissions?," Energy Policy, Elsevier, vol. 113(C), pages 356-367.
    21. Peter J Buckley & Jeremy Clegg & Chengqi Wang, 2002. "The Impact of Inward FDI on the Performance of Chinese Manufacturing Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(4), pages 637-655, December.
    22. Khan, Arshad Ahmad & Luo, Jianchao & Safi, Adnan & Khan, Sufyan Ullah & Ali, Muhammad Abu Sufyan, 2022. "What determines volatility in natural resources? Evaluating the role of political risk index," Resources Policy, Elsevier, vol. 75(C).
    23. repec:clg:wpaper:2008-02 is not listed on IDEAS
    24. Adnan Safi & Yingying Chen & Abdul Qayyum & Salman Wahab & Maaz Amin, 2023. "How does corporate social and environmental responsibility contribute to investment efficiency and performance? Evidence from the financial sector of China," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 36(2), pages 2142816-214, July.
    25. Chen, Zhonglu & Mirza, Nawazish & Huang, Lei & Umar, Muhammad, 2022. "Green Banking—Can Financial Institutions support green recovery?," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 389-395.
    26. Haider Mahmood & Maham Furqan, 2021. "Oil rents and greenhouse gas emissions: spatial analysis of Gulf Cooperation Council countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(4), pages 6215-6233, April.
    27. Wang, Kai-Hua & Zhao, Yan-Xin & Jiang, Cui-Feng & Li, Zheng-Zheng, 2022. "Does green finance inspire sustainable development? Evidence from a global perspective," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 412-426.
    28. Elkhan Richard Sadik-Zada & Wilhelm Loewenstein, 2020. "Drivers of CO 2 -Emissions in Fossil Fuel Abundant Settings: (Pooled) Mean Group and Nonparametric Panel Analyses," Energies, MDPI, vol. 13(15), pages 1-24, August.
    29. Romain Berrou & Philippe Dessertine & Marco Migliorelli, 2019. "An Overview of Green Finance," Palgrave Studies in Impact Finance, in: Marco Migliorelli & Philippe Dessertine (ed.), The Rise of Green Finance in Europe, chapter 0, pages 3-29, Palgrave Macmillan.
    Full references (including those not matched with items on IDEAS)

    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. Li, Yunfeng & Zhu, Weiping & Jiang, Xiaoxi & Yıldırım, Bilal, 2023. "Unraveling the complexity of China's sustainable development: A study on the interplay of natural resources, urbanization, and public transportation," Resources Policy, Elsevier, vol. 86(PA).
    2. Song, Chenchen & Wu, Zhendong & Dong, Rebecca Kechen & Dinçer, Hasan, 2023. "Greening south Asia: Investing in sustainability and innovation to preserve natural resources and combat environmental pollution," Resources Policy, Elsevier, vol. 86(PB).
    3. Wang, Xinghua & Su, Chi-Wei & Xue, Ziru & Xie, Xin, 2023. "Sustainable development goals perspective of natural resources: Does it paves the way for renewable sources of energy? A global case study," Resources Policy, Elsevier, vol. 86(PB).
    4. Wei, Xuecheng & Hu, Weihua, 2023. "Revisiting resources curse hypothesis in China: Exploring the asymmetric effect of green investment and green innovation," Resources Policy, Elsevier, vol. 85(PB).
    5. Wang, Lei & Su, Chi Wei & Liu, Jing & Dong, Yuxing, 2024. "Sustainable development or smoke?: The role of natural resources, renewable energy, and agricultural practices in China," Resources Policy, Elsevier, vol. 88(C).
    6. Xie, Hao & Chang, Shuangshuang & Liu, Pengqiang & Lin, Regina Fang-Ying, 2024. "Sustainable development: Uncovering the synergy between natural resources, clean technologies, and economic progress," Resources Policy, Elsevier, vol. 88(C).
    7. Du, Yuqiu & Wang, Wendi, 2023. "The role of green financing, agriculture development, geopolitical risk, and natural resource on environmental pollution in China," Resources Policy, Elsevier, vol. 82(C).
    8. Zheng, ShiYong & Liu, Hua & Hafeez, Muhammad & Wang, Xiaofeng & Fahad, Shah & Yue, Xiao-Guang, 2023. "Testing the resource curse hypothesis: The dynamic roles of institutional quality, inflation and growth for Dragon," Resources Policy, Elsevier, vol. 85(PA).
    9. Tan, Yali & Huang, Sen, 2023. "Sustainable development through digitalization: An exploration of natural resource extraction in China," Resources Policy, Elsevier, vol. 86(PA).
    10. Wei, Xuecheng & Bai, Yang, 2023. "The role of green financing and natural resources towards sustainable environment: A comparative study of US-China," Resources Policy, Elsevier, vol. 85(PA).
    11. Han, Zhihong & Gong, Lixin & Chen, Huiwen & Yüksel, Serhat, 2023. "The role of mineral and oil resources in achieving a clean environment in emerging economies: An asymmetric analysis," Resources Policy, Elsevier, vol. 86(PB).
    12. Wang, Fanyi & Ma, Wanying & Mirza, Nawazish & Altuntaş, Mehmet, 2023. "Green financing, financial uncertainty, geopolitical risk, and oil prices volatility," Resources Policy, Elsevier, vol. 83(C).
    13. Khaddage-Soboh, Nada & Safi, Adnan & Faisal Rasheed, Muhammad & Hasnaoui, Amir, 2023. "Examining the role of natural resource rent, environmental regulations, and environmental taxes in sustainable development: Evidence from G-7 economies," Resources Policy, Elsevier, vol. 86(PA).
    14. Khan, Yasir & Hassan, Taimoor & Guiqin, Huang & Nabi, Ghulam, 2023. "Analyzing the impact of natural resources and rule of law on sustainable environment: A proposed policy framework for BRICS economies," Resources Policy, Elsevier, vol. 86(PA).
    15. Yang, Bin & Wu, Qiong & Sharif, Arshian & Uddin, Gazi Salah, 2023. "Non-linear impact of natural resources, green financing, and energy transition on sustainable environment: A way out for common prosperity in NORDIC countries," Resources Policy, Elsevier, vol. 83(C).
    16. Long, Hai & Li, Wen-Wei & Otrakçı, Caner, 2023. "Sustaining environment through natural resource and human development: Revisiting EKC curve in China through BARDL," Resources Policy, Elsevier, vol. 85(PB).
    17. Khan, Yasir & Hassan, Taimoor, 2024. "Promoting sustainable development: Evaluating the influence of natural resources, high-tech export and corruption on CO2 emissions in developing economies," Resources Policy, Elsevier, vol. 88(C).
    18. Dai, Zhifeng & Luo, Zhuang & Liu, Chang, 2023. "Dynamic volatility spillovers and investment strategies between crude oil, new energy, and resource related sectors," Resources Policy, Elsevier, vol. 83(C).
    19. Han, Zhihong & Gong, Lixin & Long, Chi & Afzal, Anees, 2023. "Towards resourceful sustainability: Integrating minerals resources in achieving development goals," Resources Policy, Elsevier, vol. 87(PA).
    20. Yang, Xiaodong & Liu, Xia & Ran, Qiying & Razzaq, Asif, 2023. "How does natural resource dependence influence industrial green transformation in China? Appraising underlying mechanisms for sustainable development at regional level," Resources Policy, Elsevier, vol. 86(PA).

    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:86:y:2023:i:pb:s0301420723007857. 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.