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The Economic Value of Natural Resources and Its Implications for Pakistan’s Economic Growth

Author

Listed:
  • Zar Shah

    (Department of Economics, The University of Haripur, Haripur 22063, Pakistan)

  • Khalid Zaman

    (Department of Economics, The University of Haripur, Haripur 22063, Pakistan)

  • Haroon ur Rashid Khan

    (Faculty of Business, The University of Wollongong in Dubai, Dubai 20183, United Arab Emirates)

  • Awais Rashid

    (Department of Management Sciences, COMSATS University Islamabad, Abbottabad Campus, Abbottabad 22060, Pakistan)

Abstract

Natural resources and ecological services provide the foundation for manufactured capital, increasing public financing and decreasing inequality by diversifying the economy. The exploitation of natural resources is frequently the backbone of economic stability in developing and middle-income nations. As a result of their importance, natural resources need vigilant and long-term management. Recent research has tested two hypotheses, the natural resource blessing hypothesis and the natural resource curse hypothesis, on the impact of a country’s natural resources on its economy. This research is an essential contribution to the growing body of work that attempts to quantify natural resource endowments’ role in national economic growth. Investigations focus on Pakistan and span the years 1975 through 2020. Robust Least Square (RLS) estimations show that coal rents, energy use, inbound FDI, and oil rents contribute to a country’s economic growth. While consumption of renewable energy sources and industrial value-added have a detrimental effect. Natural resources, foreign direct investment, energy consumption, and industrial ecology are predicted to significantly impact economic growth during the next decade, according to the Impulse Response Function (IRF) and the Variance Decomposition Analysis (VDA). The findings may provide helpful information for academic and governmental institutions to develop natural resource management policies for sustainable development.

Suggested Citation

  • Zar Shah & Khalid Zaman & Haroon ur Rashid Khan & Awais Rashid, 2022. "The Economic Value of Natural Resources and Its Implications for Pakistan’s Economic Growth," Commodities, MDPI, vol. 1(2), pages 1-33, October.
    • Handle: RePEc:gam:jcommo:v:1:y:2022:i:2:p:6-97:d:955028
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