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How geopolitical risk and economic policy uncertainty impact coal, natural gas, and oil rent? Evidence from China

Author

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  • Zhou, Bingjun
  • Huang, Yan
  • Gao, Ke
  • Luo, Chunyang

Abstract

While numerous studies have delved into the determinants of natural resource rents, the influence of economic policy uncertainty and geopolitical risk on coal, natural gas, and oil rents remains underexplored. Addressing this lacuna, our study pioneers an examination of the repercussions of economic policy uncertainty, geopolitical risk, and economic growth on the rents of coal, natural gas, and oil in China spanning the period 1990–2021. Utilizing the cutting-edge Fourier ARDL (FARDL) methodology, our findings unveil that economic policy uncertainty notably hampers coal and natural gas rents. Intriguingly, geopolitical risk does not exert a significant influence on coal and gas rents. Moreover, a discernible absence of cointegration between oil rent and the trio of economic policy uncertainty, geopolitical risk, and economic growth was observed. Economic growth emerges as a double-edged sword, bolstering coal rent while adversely affecting gas rent in the long run. To optimize natural resource rents, it is imperative for policymakers to mitigate economic policy uncertainty, thereby invigorating the coal and natural gas sectors. Concurrently, the promotion of economic growth can augment coal rent, but the natural gas sector demands innovative strategies due to its divergent response.

Suggested Citation

  • Zhou, Bingjun & Huang, Yan & Gao, Ke & Luo, Chunyang, 2024. "How geopolitical risk and economic policy uncertainty impact coal, natural gas, and oil rent? Evidence from China," Resources Policy, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:jrpoli:v:88:y:2024:i:c:s0301420723011042
    DOI: 10.1016/j.resourpol.2023.104393
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