Resources Policy 81 (2023) 103315

Contents lists available at ScienceDirect

Resources Policy
journal homepage: www.elsevier.com/locate/resourpol

How does natural resource abundance affect green total factor productivity
in the era of green finance? Global evidence
Yang Liu a, Jianda Wang a, Kangyin Dong a, **, Farhad Taghizadeh-Hesary b, c, *
a
School of International Trade and Economics, University of International Business and Economics, Beijing, 100029, China
b
School of Global Studies, Tokai University, Japan
c
TOKAI Research Institute for Environment and Sustainability (TRIES), Tokai University, Japan

A R T I C L E I N F O A B S T R A C T

Keywords: Assessing the impact of natural resources on green economic development in a global context and exploring the
Natural resource abundance impact mechanism are important for addressing the resource curse and achieving Sustainable Development Goals
Green finance (SDGs). Therefore, this study constructs an econometric model to explore the impact of natural resource
GTFP
abundance (NRA) on green total factor productivity (GTFP) based on a balanced panel dataset of 149 countries
Moderating effect
Resource curse
from 2001 to 2019. In addition, this study further performs heterogeneity and asymmetry checks and examines
the moderating effect of green finance. The main findings are: (1) NRA inhibits the increase of GTFP, i.e., the
resource curse hypothesis is verified; (2) the inhibitory effect of NRA on GTFP is greater in regions with higher
green productivity than in other regions; (3) green finance can effectively mitigate the inhibitory effect of NRA
on GTFP. Finally, the results of this paper provide valuable reference suggestions for relevant policymakers.

1. Introduction United Nations Sustainable Development Summit, with the aim of

harmonizing social, economic, and environmental development. In
Since the industrialization process, global economic development 2019, the European Union released the European Green Deal, which
has advanced at an unprecedented rate, and the consumption and proposes to take the lead in achieving carbon neutrality by 2050 (Eu­
exploitation of natural resources have reached alarming levels. Ac­ ropean Commission, 2021). The 26th Conference of the Parties to the
cording to the World Bank, the gross domestic product (GDP) of all United Nations Framework Convention on Climate Change in November
countries worldwide increased 7.96 times between 1960 and 2021 (in 2021 was a key collective effort to achieve net zero emissions by 2050
constant 2015 prices) (WDI, 2022). This has been accompanied by (Dogan et al., 2022). Achieving green and sustainable socio-economic
global warming, resource depletion, ecological vulnerability, and loss of development has become an eternal theme.
species diversity (Dou et al., 2022; Khan et al., 2021; Pradel et al., 2021; Another reality strongly tied to the economy’s transition to green
Wang et al., 2022b; Zhao et al., 2022). Statistics show that the total development is the possibility that regions with abundant natural re­
global consumption of natural resources reached 100.6 billion tons in sources may experience significant difficulties throughout this process.
2020, 3.73 times the consumption in 1970, with an average annual The great majority of developing nations and areas with plenty of nat­
growth rate of 5.45% (Resilience, 2020). Countries and organizations ural resources did not experience fast economic development after
around the world have promoted the idea of a "low-carbon society," World War II, and their use of resources was less efficient than that of
which entails the coordinated development of the economy, resources, regions with less natural resources (Cheng et al., 2020). Auty (2001)
and ecology. Countries have prioritized the establishment of green argues that this is the "resource curse" phenomenon, which stems mainly
sustainable development and the improvement of GTFP as important from the inefficient use and waste of natural resources. On the one hand,
national strategies to deal with global climate change and increased rent-seeking behavior, official corruption, and civil wars over resource
environmental risks and to achieve sustainable development (Wang and revenues have depleted the advantages of natural resources themselves
Feng, 2021). In 2015, the 17 SDGs were officially endorsed by the (Angrist and Kugler, 2008). According to statistics, 61% of global

* Corresponding author. School of Global Studies, Tokai University, Japan.

** Corresponding author. School of International Trade and Economics, University of International Business and Economics, Beijing, 100029, China.
E-mail addresses: [email protected] (Y. Liu), [email protected] (J. Wang), [email protected] (K. Dong), [email protected] (F. Taghizadeh-
Hesary).

https://doi.org/10.1016/j.resourpol.2023.103315
Received 29 October 2022; Received in revised form 14 December 2022; Accepted 11 January 2023
Available online 16 January 2023
0301-4207/© 2023 Elsevier Ltd. All rights reserved.
Y. Liu et al. Resources Policy 81 (2023) 103315

resources come from politically unstable countries (Pradel et al., 2021). hand, green finance can also encourage enterprises to increase invest­
On the other hand, natural resources can also inhibit the development of ment in scientific research, stimulate them to carry out green techno­
manufacturing to some extent, just as the boom in natural gas during the logical innovation, enhance their environmental awareness, and
last century severely hit Dutch exports in agriculture and other indus­ promote green transformation (Hu et al., 2021; Xu and Li, 2020; Zhou
trial sectors. Moreover, the learning, accumulation, and diffusion effects et al., 2020). We cannot ignore the important role of green finance in
of manufacturing have led to the phenomenon of reduced and inefficient achieving SDGs. Therefore, it is necessary to further assess whether
use of regional productivity (Sachs and Warner, 1997). However, green finance mitigates or exacerbates the "curse" for GTFP.
breaking the resource curse and achieving resource blessings also exist Given the above pending issues, we assess the impact of NRA on
(Dogan et al., 2020). Ideally, natural resources provide a rich base for GTFP using the instrumental variable-generalized method of moments
regional and national development, promote regional economic growth (IV-GMM) technique accessing 19 years of data from 149 countries
free from political interference, enhance resource control, and achieve worldwide and explore the heterogeneity of the impact according to
sustainable local prosperity. However, the geographic distribution of geographic region and level of GTFP. We further explore the moderating
global green growth and natural resources is currently regarded as un­ effect of green finance on the relationship between NRA and GTFP. This
even (see Figs. 1 and 2). For instance, although the African continent is paper makes the following main research contributions. First, the paper
rich in natural resources, this has not contributed prominently to its assesses for the first time whether there is a resource curse between NRA
green economic growth. The resource curse hypothesis seems to be and GTFP using a global panel, which will be beneficial for local gov­
supported by the fact that countries with higher levels of green growth ernments in providing necessary suggestions for the more rational use of
are often not countries with more abundant natural resources. This local resources. Second, this paper innovatively assesses the moderating
complex relationship between natural resources and local green sus­ role of green finance in the relationship between NRA and GTFP, which
tainable development has puzzled scholars and governments. provides a valuable reference for the government to alleviate the local
As scholars have done with NRA and GTFP, more environmental resource curse phenomenon. Finally, the paper provides valuable
factors (e.g., climate, energy, and land) are taken into account, leading reference recommendations for promoting global green economic
to a more complex issue. Thus, assessing whether there is a natural growth with respect to encouraging green exploration and development,
resource curse or blessing between NRA and GTFP has higher signifi­ strengthening government macro-regulation, and improving the green
cance for regions and countries aspiring to achieve green and sustain­ financial system.
able development. Moreover, we need to propose not only natural The remainder of the paper is structured as follows: Section 2 pre­
resource-related hypotheses, but more importantly, how to mitigate sents a literature review on the natural resource curse and the rela­
the possible curse and help local governments achieve green and low- tionship between NRA and GTFP. Section 3 discusses the research
carbon development. Green finance, as an important tool to connect methodology and data sources of this paper. Section 4 presents the main
environmental protection and economic growth, has received attention findings of the paper and the analysis. Section 5 provides further dis­
from governments of various countries. To encourage green, low- cussion. And finally, we present the main findings and policy
carbon, and high-quality economic and social development, China, for recommendations.
instance, is actively advancing the development of green finance and
strengthening the green financial system. Green finance is the key to 2. Literature review
promote green transformation (Zhang et al., 2022). On the one hand,
green finance can promote the optimization of economic structure, 2.1. Resource curse hypothesis
enhance the green transformation of the supply side, and promote green,
sustainable, and high-quality economic development (He et al., 2019a, The essential components of production in an area are thought to
2019b; Lee et al., 2022; Xie et al., 2020; Zhou et al., 2020). On the other include labor, capital, and natural resources, all of which have a positive

Fig. 1. Spatial distribution and trend of GTFP from 2001 to 2019.

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Y. Liu et al. Resources Policy 81 (2023) 103315

Fig. 2. Spatial distribution and trend of natural resource rents from 2001 to 2019.

marginal impact on economic growth. Other things being equal, areas development in the BRIC countries, confirming their direct financial
rich in natural resources receive more productive possibilities for capital resource curse phenomenon. However, some studies have produced
accumulation than areas poor in natural resources, leading to faster contrasting findings. A study by Dogan et al. (2020) identifies the pos­
economic growth (Cheng et al., 2020). However, this is not the reality, itive impact of various rents such as oil, coal, and natural gas on
as the world’s leading resource-rich countries have not experienced financial development in developed countries, thus supporting the ex­
rapid economic growth due to their abundance of resources, and have istence of the financial resource blessing in developed countries.
even grown more slowly than resource-poor countries and regions. Auty Several scholars have tested other perspectives on the natural
and Mikesell (1998) attribute this phenomenon to the natural resource resource curse. Atkinson and Hamilton (2003) suggest that the curse
curse, which has sparked much interest among scholars. may arise because governments lack the capacity to manage large
On the one hand, some academics have assessed the resource curse amounts of resource revenues on a sustained basis. Xue et al. (2020)
hypothesis from the viewpoint that there is a negative and significant argue that the negative effect of resource industry agglomeration on
relationship between NRA and economic growth. For example, Satti economic growth explains the resource curse hypothesis. From the
et al. (2014) investigate the nexus between NRA and economic growth above studies, we can see that the phenomenon of the resource curse or
in Venezuela, and their results confirm that the abundance of natural resource blessing is controversial, and most scholars only explore the
resources in that country hinders economic growth, thus confirming the relationship between NRA and economic growth, and the scope of
resource curse phenomenon. Wang et al. (2019b) use panel data for research is relatively limited.
Chinese provinces from 2005 to 2018 to assess the characteristics of
economic growth and natural resources in China, and their results
confirm the existence of the resource curse in China. Murshed and Serino 2.2. NRA-GTFP nexus
(2011) explore the natural resource curse from a trade perspective,
arguing that it is the trade in unprocessed natural resource products that GTFP is evolved from total factor productivity (TFP) and differs from
is the major impediment to economic growth. The existence of the TFP in that it considers both environmental and economic benefits.
natural resource curse has also been tested on a sample of developed Academics have conducted substantial and in-depth research on the
countries (Shahbaz et al., 2019). However, Arin and Braunfels (2018) do factors influencing TFP. For example, in the context of accumulating
not find a natural resource curse using cross-country data, and their international political and economic risks, some scholars have studied
findings confirm that oil rents have a strong positive effect on long-term the impact of climate policy uncertainty and variations in the price of oil
economic growth. Solarin (2020) also confirms the strong positive internationally on TFP (Ren et al., 2022b, 2023), while others have
driving effect of US shale oil production on employment and GDP. concentrated on the impact of political relations on business environ­
Further, scholars have explored the "financial resource curse," sug­ mental and financial decisions (Wang et al., 2022; Ren et al., 2022a).
gesting that the growth of natural resource rents and abundance may Academic research on the influencing factors of GTFP is in an explosive
also impede the health of the financial sector. For instance, Asif et al. period. In the context of accelerating resource depletion and increasing
(2020) evaluate the financial resource curse hypothesis for Pakistan and environmental pollution, some scholars have also focused on the impact
show the depressive effect of coal and oil rents on the broad money of natural resources on GTFP.
supply and that gas rents hinder market capitalization. Tang et al. Natural resources are vital to economic development, but at the same
(2022) empirically confirm the negative association between NRA and time, they pose serious environmental problems. Therefore, many
financial development using data from ASEAN countries from 1984 to scholars have explored the nexus between natural resources and green
2018, and note that favorable business regulations have alleviated the economic growth or GTFP. For example, Cheng et al. (2020) investigate
financial resource curse in ASEAN countries. Hussain et al. (2020) the nexus between natural resources and GTFP in China, and find that
confirm the negative association between energy prices and financial GTFP is lower in provinces relatively richer in natural resources than in
other provinces, and the NRA significantly inhibits the green growth of

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Y. Liu et al. Resources Policy 81 (2023) 103315

the Chinese economy through resource industry dependence. Using 3.2. Variable measures
panel data of Chinese prefecture-level cities, Xie et al. (2022) investigate
the relationship between land resource mismatch and GTFP. Their re­ 3.2.1. Dependent variable
sults show that inappropriate land resource mismatch directly inhibits The dependent variable in this paper is GTFP, and the method used is
urban GTFP. Zhao et al. (2021) assess the relationship between resource the Global Malmquist–Luenberger (GML) index, which is widely
endowment and GTFP in the Yellow River Basin using the generalized employed to measure green economic growth (Lin and Chen, 2018; Liu
method of moments (GMM) technique, and show that resource and Xin, 2019). Referring to Oh (2010a) and Oh (2010b), this paper
endowment inhibits urban green development and that there is a constructs the GML index based on the Data Envelopment Analysis
resource curse. Some scholars offer a different view. For example, Huang (DEA) method. We assume that the production system is composed of
and Zhao (2022) investigate green growth under natural resource use of multiple decision-making units (DMU), each DMU containing N input
energy (coal, oil, and natural gas) in China between 1980 and 2020 and factors x = (x1 , ⋯, xn ) ∈ R+ N , obtaining M desirable outputs y =
show that reducing the application of natural resources such as coal (y1 , ⋯, yM ) ∈ R+ M and I undesirable outputs b = (b1 ,⋯,bI ) ∈ RI ; then, the
+

minimizes the environmental burden and facilitates green growth. In input-output of k economies at t period is (xtk , ytk , btk ). To be specific, the
addition, some scholars believe the impact of natural resources and input factors used in this study include labor, capital, and energy,
GTFP is ambiguous. For instance, Lee and He (2022) investigate the measured by the number of people engaged per million people, capital
heterogeneous marginal effects of resources on GTFP under different stock, and final energy consumption, respectively; desirable outputs
growth paths using panel data for each province in China from 2008 to refer to GDP; and undesirable outputs are the pollutants produced,
2018. Their results show that natural resources present different effects including CO2, SO2, and PM2.5. And the general production possibility
on GTFP across various growth paths. Therefore, it is debatable whether set PG (x) = P1 (x) ∪ P2 (x) ∪ ⋯PT (x) can be set as:
natural resources are a resource curse or a resource blessing for GTFP. ⎧ ⎫
⎪ ∑T ∑K ∑T ∑K ⎪
⎪
⎨ (yt , bt ) : z t t
y ≥ yt
, ∀m; z t t
b ≥ bt
, ∀i; ⎪
⎬
2.3. Literature gaps PG (x) = ∑T ∑K
t=1 k=1 k km km t=1 k=1 k ki ki

⎪ ∑ K ⎪
⎪
⎩ zt xt ≤ xtkn , ∀n; zt = 1, ztk ≥ 0, ∀k ⎪
⎭
k=1 k kn k=1 k
Although many scholars have carefully analyzed the resource curse
t=1

in terms of economic growth (see Section 2.1), and some scholars have (3)
assessed the natural resource curse in terms of the nexus between NRA
where zk is the weight of each observation surface. Next, the non-radial
and GTFP (see Section 2.2), there are still knowledge gaps in the above
and non-regular SBM directional distance function is set as:
studies, especially at the following levels. First, scholars of the two
opposing arguments of the natural resource curse and the natural ̅→ { ⃒( )
DG (x, y, b, g) = max β⃒ y + βgy , b − βgb ∈ PG (x)
}
(4)
resource blessing have not been able to reach a consistent conclusion.
Second, no definite conclusion has been reached on the existence of the where g = (gy , gb ) is the direction vector, and g ∈ R+
M × RS , β is the value
+
natural resource curse and its impact on green economic growth.
of the distance function to search for the direction of maximizing
Finally, few scholars have analyzed how to mitigate this natural
desirable output and minimizing undesired output. Therefore, the GML
resource curse phenomenon in the context of green finance.
index is set as:

3. Method and data ̅→

1 + DG (xt , yt , bt , g)
GMLt+1
t = ̅→ (5)
1 + DG (xt+1 , yt+1 , bt+1 , g)
3.1. Econometric model
Since the GML index represents the change in productivity in two
To assess the resource curse effect of GTFP, we construct a research periods, if GMLt+1
t > 1, it denotes that the productivity of time t + 1
framework to empirically investigate the relationship between NRA and increases compared to time t, and vice versa. To accurately obtain the
GTFP. To prevent endogeneity problems arising from omitted variable GTFP in time t, we calculate it through the following equation:
bias, we consider the effects of a set of control variables, including
GTFPt = GMLtt− 1 GHGt− (6)
economic factors, trade factors, and energy structure factors, with 1

reference to existing literature. The specific form of the research

where GHG2000 = 1.
framework is shown in equation (1).
GTFPit = f (NRAit , PGDPit , TRAit , RECit ) (1) 3.2.2. Key independent variable
The present study draws on Cheng et al. (2020) to distinguish be­
where subscript i represents the country, t refers to the year, GTFPit tween NRA and natural resource dependence (NRD). There is a clear
stands for the GTFP, NRAit denotes the abundance of natural resources, difference between them (Norman, 2009). NRA is used to measure the
PGDPit refers to economic development, TRAit represents trade open­ total amount of natural resources a country or region possesses, and is
ness, and RECit represents the share of renewable energy consumption. relatively stable; however, NRD reflects the degree of dependence of a
Next, we transform some of the variables into the natural logarithmic country or region on natural resources for economic development,
form to mitigate the effect of potential heteroskedasticity; the inde­ which is vulnerable to socio-political and other factors and is more
pendent variable is standardized to eliminate the effect of the magnitude volatile (Cheng et al., 2020; Stijns, 2005). To the best of our knowledge,
of the variables’ variance. Then equation (1) can be rewritten in the most studies now prove the existence of the resource curse hypothesis
following form: based on NRD, but there is a lack of empirical studies on NRA for green
growth (Ding and Field, 2005; Norman, 2009; Wu et al., 2018). There­
LnGTFPit = α0 + α1 z NRAit + α2 LnPGDPit + α3 LnTRAit + α4 LnRECit + εit
fore, in this study, natural resource abundance (denoted as NRA) is the
(2)
core independent variable and is measured by natural resource rents per
where α0 stands for the constant term, α1 − α4 refer to the parameters to capita.
be estimated, and εit represents the random disturbance term. According
to the resource curse hypothesis, we expect α1 < 0. 3.2.3. Control variables
To avoid errors in the estimated coefficients arising from omitted
variable bias, this study uses the following control variables that may

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Y. Liu et al. Resources Policy 81 (2023) 103315

affect GTFP: (1) Economic growth (denoted as PGDP), measured by GDP Table 2
per capita; (2) Trade openness (denoted as TRA), measured by total Results of the benchmark regression.
exports and imports of goods and services trade as a share of GDP; and Dependent variable: LnGTFP
(3) Renewable energy consumption (denoted as REC), measured by the
Variables OLS FGLS IV-GMM
share of renewable energy consumption of total energy.
z_NRA − 0.040*** − 0.035*** − 0.057***
(0.010) (0.005) (0.008)
3.2.4. Moderating variable LnPGDP 0.051*** 0.047*** 0.040***
Furthermore, this study explores the possible pathways through (0.011) (0.002) (0.005)
which NRA affects GTFP, and the moderating variable used is green LnTRA 0.072*** 0.050*** 0.074***
finance (denoted as GF), measured by the financial support provided for (0.027) (0.006) (0.027)
LnREC 0.022*** 0.022*** 0.012***
clean energy and renewable energy production (including hybrid
(0.007) (0.002) (0.005)
systems). Constant 0.088 0.121*** 0.052
(0.137) (0.030) (0.135)
Obs. 2831 2831 2682
3.3. Data sources and descriptive statistics Number of countries 149 149 149
Kleibergen-Paap rk LM statistic 61.47
In this study, we use 19 years of balanced panel data from 149 P-value of Kleibergen-Paap rk LM 0
countries. Data for GTFP are obtained through calculation in Section statistic
Kleibergen-Paap rk Wald F statistic 432.3
3.2.1. The relevant data for input and output varibales are from the
P-value of Hansen J statistic 0.399
World Bank database and Penn World Table 10.0. Data for NRA, NRD,
TRA, PGDP, and REC are obtained from the World Bank’s World Notes: Standard errors in parentheses; ***p < 0.01.
Development Indicators (WDI) database. The data for GF are obtained
from Our World in Data website (https://ourworldindata.org/). To increase in NRA causes a 0.057% decrease in GTFP. In other words,
eliminate the effect of price fluctuations, the GDP series data in this resource-rich countries suffer from the resource curse and do not derive
study are all converted to constant 2015 prices. Table 1 presents the positive benefits from natural resource rents. This implies that natural
details of each variable. resources do not function autonomously to stimulate green economic
growth (Cheng et al., 2020). This can be attributed to inefficiencies in
4. Estimation methods and empirical results the consumption and extraction of natural resources, inadequate
resource management systems, flawed ownership structures (Ulucak
4.1. Benchmark estimates and DanishOzcan, 2020), and poor state governance (Niknamian, 2019).
A study by Cheng et al. (2020) yields similar results, validating the
In this study, we use three methods to evaluate the impact of NRA on resource curse hypothesis with the case of China. They argue that re­
GTFP. First, we use the ordinary least squares (OLS) method for esti­ gions rich in natural resources tend to develop resource-based industries
mation. Second, considering the potential effects of heteroskedasticity more than other industries, triggering the resource curse. In addition,
and autocorrelation, we relax the assumption of independent and ho­ Badeeb et al. (2017) and Mlachila and Ouedraogo (2020) find that some
mogeneous distribution of the random disturbance terms, and adopt the sub-Saharan countries are plagued by the resource curse due to the lack
feasible generalized least squares (FGLS) for estimation (Wu et al., of effective management and institutional systems for natural resource
2020). Third, considering the potential endogeneity problem, we use the rents. The abundance of natural resources leads to low prices and further
IV-GMM method for estimation. Columns 1 to 3 of Table 2 show the contributes to the inefficient use of resources, which inhibits sustainable
corresponding empirical regression results, respectively. We choose the development (Adom and Adams, 2018; Amowine et al., 2021; Wang
IV-GMM technique as the benchmark regression and conduct a series of et al., 2019a; Xu et al., 2019). Amowine et al. (2021) discover that
tests on the instrumental variables to improve the accuracy of the esti­ overexploitation of natural resources adversely affects the ecology and
mation results (Wang et al., 2022a). From the results of the technical sustainable development of the African continent. Wang et al. (2019a)
tests in column 3 of Table 2, the p-value of the Kleibergen-Paap rk conduct a study on China and find a negative correlation between nat­
Lagrange Multiplier statistic is less than 0.1, ensuring that the instru­ ural resource abundance and carbon emission efficiency.
mental variables are not underidentified (Kleibergen and Paap, 2006). Some evidence confirms that the increase in natural resource rents
And the Kleibergen-Paaprk Wald F statistic is greater than the critical has led to an increase in the extraction of natural resources, which has
value derived by Stock and Yogo (2002), which indicates that there is no exacerbated environmental hazards (Ahmad et al., 2020; Erdoğan et al.,
weak instrumental variable problem. In addition, the p-value of the 2020; Usman et al., 2022; Zia et al., 2021). Some scholars find that
Hansen J statistic is greater than 0.1, which indicates that there is no natural resource rents increase the ecological footprint (Ahmad et al.,
problem of over-identification of instrumental variables. 2020; Erdoğan et al., 2021; Hassan et al., 2019; Jahanger et al., 2022;
As can be seen in column 3 of Table 2, the coefficient of z_NRA is Shittu et al., 2021; Sun et al., 2021; Sun and Wang, 2021; Yang et al.,
significantly negative, which indicates that NRA has a significant 2022) and carbon emissions (Agboola et al., 2021; Bekun et al., 2019;
depressive effect on GTFP. Specifically, every 1 standard deviation Chen and Chen, 2011; He et al., 2022; Khan et al., 2020; Zhou et al.,

Table 1
Details of the variables employed in this study.
Variables Definition Mean Std. Min Max Source
dev

LnGTFP Green total factor productivity. 0.180 0.416 − 9.210 2.793 Calculated from Section
3.2.1.
LnPGDP Gross domestic product per capita. − 5.323 1.431 − 9.210 − 2.186 WDI
LnTRA Total exports and imports of goods and services trade as a share of GDP. 4.312 0.538 0.198 6.081 WDI
LnREC The share of renewable energy consumption in total energy. 2.510 2.463 − 9.210 4.588 WDI
z_NRA Natural resource rents per capita. 0 1 − 0.296 9.747 WDI
LnGF The financial support provided for clean energy and renewable energy production 15.42 3.214 8.517 22.37 Our World in Data website.
(including hybrid systems).

5
Y. Liu et al. Resources Policy 81 (2023) 103315

2010). For example, the research by Erdoğan et al. (2021) reinforces the Table 3
resource curse argument from an ecological perspective, that countries Results of the robustness check.
rich in natural resources are nevertheless at higher risk of ecological Dependent variable: LnGTFP
depletion. He et al. (2022) found that natural resources have a consid­
Variables (1) (2) (3)
erable long-term and short-term impact on rising greenhouse gas emis­
sions, which result in a deterioration of environmental quality. This z_NRA − 0.054*** − 0.045***
(0.008) (0.008)
finding reminds us that the extraction and consumption of natural re­ z_NRD − 0.108***
sources are not sustainable. The process of natural resource exploitation (0.018)
may result in deforestation and other environmentally harmful activities LnPGDP 0.048*** 0.016**
(Nathaniel et al., 2021). Excessive dependence on natural resources has (0.005) (0.008)
LnGDP 0.039***
a negative impact on environmental sustainability (He et al., 2022).
(0.003)
Therefore, it is imperative to develop protective management practices. LnTRA 0.051*** 0.130*** 0.056***
For instance, the Chinese government revised the Regulations on the (0.019) (0.016) (0.019)
Implementation of the Land Management Law in 2021 to address issues LnREC 0.016*** 0.016*** 0.004
with ineffective natural resource inspectors and overlapped areas. This (0.005) (0.005) (0.007)
Constant 0.182* − 0.0836*** 0.023
revision for the first time clarified the scope and modalities of natural (0.095) (0.094) (0.091)
resource inspection and established political responsibilities for local Obs. 2682 2682 2682
governments to carry out the inspection function. As a comparison, the Kleibergen-Paap rk LM statistic 61.44 78.30 133.6
first and second columns of Table 2 show the empirical estimation re­ P-value of Kleibergen-Paap rk LM 0 0 0
statistic
sults of OLS and FGLS, which further confirm the negative relationship
Kleibergen-Paap rk Wald F statistic 568.8 443.5 60.53
between NRA and GTFP. P-value of Hansen J statistic 0.448 0.165 0.400
Table 2 also shows the results of the empirical estimation of the
Notes: Standard errors in parentheses; ***p < 0.01, **p < 0.05, and * p < 0.1.
control variables and we find that: First, the coefficient of PGDP is
significantly positive, which indicates that economic growth is condu­
cive to an increase in GTFP. Du and Li (2019) reach a similar conclusion. PGDP.
This finding is in line with our expectation, since higher income levels Third, we replace the independent variable (NRA) with natural
imply the ability to invest more resources to improve environmental resource dependence (denoted as NRD), which is measured by the share
quality. of natural resource rents in GDP. The estimation results in the third
Second, the coefficient of TRA is significantly positive, which in­ column show that the coefficients of all variables are significant, and the
dicates that greater openness and increased trade flows are conducive to signs are consistent with the benchmark regression.
GTFP. This finding can be explained by the fact that trade globalization Overall, the results of the above three robustness tests confirm the
facilitates the transfer of clean, green, and low-carbon technologies from robustness of the estimation results of the benchmark regression.
advanced to backward countries, which enhances the sustainability of
green economic development (Dou et al., 2020; Shittu et al., 2021). In 5. Further discussion
addition, trade promotes economic growth and at the same time facili­
tates an increase in environmental awareness and the dissemination of 5.1. Heterogeneity analysis
environmental laws and regulations, prompting companies to engage in
green technological innovation to enhance competitiveness (Yu et al., Drawing on the World Bank’s regional division method, we divide
2022). the full sample into four subsamples, namely EPS (including East Asia,
Third, the coefficient of REC is significantly positive, which implies Pacific, and South Asia), SMN (including Sub-Saharan Africa, the Middle
that increasing the share of renewable energy in energy consumption is East, and North Africa), LCN (including Latin America, the Caribbean,
beneficial for increasing GTFP. Many scholars support the positive and North America), and ECA (including Europe and Central Asia) to
ecological impact of increasing renewable energy consumption (Bekun examine regional heterogeneity. The estimated results are shown in
et al., 2019; Destek and Sinha, 2020; Mehmood, 2022; Usman et al.,
2020; Wang et al., 2021), and renewable energy is considered an Table 4
effective way to achieve economic, social, and environmental sustain­ Results of the heterogeneity check.
ability (Bilgili and Ulucak, 2020). In recent years, countries have grad­
Dependent variable: LnGTFP
ually increased their investment in renewable energy and have received
good feedback. For example, a study by Yu et al. (2022) reveals the Variables EPS SMN LCN ECA

significant contribution of renewable energy to enhance green z_NRA − 0.086** − 0.025*** − 0.151* 0.953***
productivity. (0.036) (0.008) (0.083) (0.150)
LnPGDP 0.122*** 0.010 0.129*** − 0.071***
(0.011) (0.035) (0.017) (0.010)
4.2. Robustness checks LnTRA − 0.068*** 0.120* 0.118*** 0.122***
(0.025) (0.065) (0.028) (0.035)
To ensure that the empirical estimation results are robust, this study LnREC 0.034*** 0.022* 0.107*** 0.029*
(0.013) (0.011) (0.020) (0.016)
conducts robustness tests in the following three ways (see Table 3): First,
Constant 1.028*** − 0.421 − 0.020 − 0.345*
we winsorize the quartiles below 0.5% and above 99.5% of the depen­ (0.148) (0.403) (0.124) (0.180)
dent variable. The first column shows the regression results after win­ Obs. 345 1044 416 680
sorizing. The coefficients of all variables are significant, and the signs Kleibergen-Paap rk LM 75.06 59.26 83.01 85.69
remain consistent with the benchmark regression (see the third column statistic
P-value of Kleibergen-Paap 0 0 0 0
of Table 2). rk LM statistic
Second, we perform a robustness test by replacing PGDP with GDP. Kleibergen-Paap rk Wald F 129.2 434.5 83.90 236.7
The estimates in the second column show that the coefficient of z_NRA statistic
remains negative at the 1% level of significance. The coefficients of the P-value of Hansen J 0.366 0.165 0.187 0.313
statistic
control variables are also all significant and their signs remain un­
changed. The coefficient of GDP is significantly positive, the same as Notes: Standard errors in parentheses; ***p < 0.01, **p < 0.05, and * p < 0.1.

6
Y. Liu et al. Resources Policy 81 (2023) 103315

Table 4. We find that the coefficients of NRA are significantly negative in emphasis has been given to green finance as a crucial tool for bridging
EPS, SMN, and LCN; however, they are significantly positive in ECA. environmental preservation and economic growth. For example, since
This indicates that the NRA is not favorable for GTFP in the EPS, SMN, China’s economic development has entered a new normal, a series of
and LCN areas, but can contribute to the increase of GTFP in ECA. The green finance policies have been introduced, such as the 2017 policy
reason may be that, on the one hand, European countries are very supporting the establishment of a pilot zone for green finance reform
focused on green and sustainable development. The European Green and innovation to help facilitate the transition away from a crude eco­
Deal was published by the European Commission in December 2019, nomic development model to pursue green economic growth. In addi­
and incorporates green development strategies into the legal framework tion, some academic studies have found that green finance can
system (European Commission, 2019; Filipović et al., 2022). On the contribute to the achievement of sustainable development goals by
other hand, Central Asia is rich in natural resources and is located at the encouraging green technology innovation and raising environmental
core of the Belt and Road Initiative (BRI), but is backward in terms of awareness to support a green transition (Hu et al., 2021; Wang et al.,
infrastructure and technology and has low resource utilization (Dorian, 2022; Xu and Li, 2020; Zhou et al., 2020).
2006; Tleuken et al., 2022). However, Central Asian countries have To further investigate whether green finance can mitigate the
promoted green and sustainable economic development by strength­ inhibitory effect of NRA on GTFP, we introduce green finance (i.e.,
ening economic and trade cooperation with countries along the BRI. LnGF) and the interaction term between green finance and NRA (i.e.,
LnGF*z_NRA) sequentially in equation (2). Thus, the moderating effect
5.2. Asymmetry analysis model is set as shown in equation (8):
LnGTFPit = β0 + β1 z NRAit + β2 LnPGDPit + β3 LnTRAit + β4 LnRECit
To further investigate the effect of NRA on GTFP at different levels of (8)
+β5 LnGFit + β6 LnGFit ∗ z NRAit + ηit
green productivity, this study conducts an asymmetry test using a panel
quantile regression technique. The equation is set as follows: where β0 represents the constant term, ηit stands for the random
disturbance term, β1 − β6 refer to the coefficients to be estimated, and
Qτ (LnGTFPit ) = λ0τ + λ1τ z NRAit + λ2τ LnPGDPit + λ3τ LnTRAit + λ4τ LnRECit
LnGFit denotes green finance, which is the moderating variable used in
+ εit this study. The existence of the moderating effect is verified if the co­
(7) efficient β6 is significant.
Table 6 shows the results of the estimation between NRA and GTFP
where the dependent variable Qτ (LnGTFPit ) represents the τth quantile of after adding LnGF and the interaction term (i.e., LnGF ∗ z NRA). The
the GTFP. λ1τ − λ4τ represent the estimated coefficients of the indepen­ coefficient of LnGF in the first column is significantly positive, indicating
dent and control variables at the τth quantile level. that green finance can contribute to GTFP. Further, the second column
The estimated results of the asymmetry test are shown in Table 5, shows that the coefficient of z_NRA is significantly negative, but the
and we also draw Fig. 3. The estimation results show that the estimated coefficient of LnGF ∗ z NRA is significantly positive, which indicates that
coefficients of NRA are significantly negative at all quantile levels, green finance can effectively mitigate the inhibitory effect of NRA on
confirming the adverse effect of NRA on GTFP. Further, we find that the GTFP. Many studies have confirmed the positive impact of green finance
absolute value of the coefficient of z_NRA is significantly larger at the development on enhancing environmental quality (Majeed, 2020).
90th quantile level than at other quantile levels. This implies that the Green finance provides the necessary funds for green sustainable
depressive effect of NRA on GTFP is greater in regions with higher GTFP. development projects at a low cost (Shahbaz et al., 2013), promotes the
This is because regions with higher levels of green economic develop­ application of environmental facilities (Jalil and Feridun, 2011), im­
ment tend to rely more on clean and renewable energy sources or proves clean green technological innovation (Awan et al., 2020; Baloch
through imports to drive their economies (Copeland and Taylor, 1994), et al., 2018; Dogan and Seker, 2016), and enhances production effi­
and do not engage in the large-scale extraction of domestic natural re­ ciency, thus improving GTFP. For example, studies by Charfeddine and
sources. As a result, natural resource extraction practices may have a Mrabet (2017), Hafeez et al. (2019), and Zhou et al. (2020) find that
greater negative impact on the green economic growth of these coun­ green finance helps enhance environmental quality and promote envi­
tries and regions. In addition, the control variables are largely significant ronmental sustainability. The work of Lee and Lee (2022) and Zheng
at different quantile levels, and the signs remain unchanged. et al. (2021) verifies the positive impact of green finance on GTFP.
Moreover, many countries take the development of green finance as an
5.3. Moderating effect analysis important means to promote green and sustainable economic develop­
ment. For example, China issued the Green Finance Guidelines for the
Governments are increasingly promoting green economic growth Banking and Insurance Industry in June 2022 to provide additional
since it is essential to advancing global sustainable development. Much guidance for the banking and insurance industry in the development of
green finance, active support of various economic activities that benefit
both the environment and society, and orderly promotion of carbon
Table 5
Results of the asymmetry check.
peaking and carbon neutral work.

Dependent variable: LnGTFP

6. Conclusions and policy implications
Variables q10 q25 q50 q75 q90

z_NRA − 0.048*** − 0.043*** − 0.036*** − 0.052*** − 0.079*** 6.1. Conclusions

(0.013) (0.014) (0.006) (0.013) (0.016)
LnPGDP 0.058*** 0.039*** 0.042*** 0.057*** 0.052*** Increasing the evaluation of green and sustainable economic devel­
(0.007) (0.004) (0.004) (0.009) (0.010)
opment is an important strategy to help countries achieve SDGs. Based
LnTRA 0.002 0.012 0.039*** 0.056** 0.094***
(0.034) (0.011) (0.010) (0.026) (0.036) on a global perspective, this study explores the causal relationship and
LnREC 0.036*** 0.022*** 0.016*** 0.015** − 0.011 impact mechanism between NRA and GTFP. Therefore, we conduct an
(0.006) (0.005) (0.003) (0.006) (0.014) empirical regression analysis using balanced panel data of 149 countries
Constant 0.102 0.103** 0.140*** 0.334** 0.465** from 2001 to 2019. In addition, we perform regional heterogeneity and
(0.181) (0.052) (0.050) (0.136) (0.184)
Obs. 2831 2831 2831 2831 2831
asymmetry checks to identify the effects of potential heterogeneity. To
explore the impact mechanism between NRA and GTFP, we also carry
Notes: Standard errors in parentheses; ***p < 0.01 and **p < 0.05.

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Y. Liu et al. Resources Policy 81 (2023) 103315

Fig. 3. Change trend of the coefficients of variables in the panel quantile regression.
Notes: The X-axis indicates the different GTFP quartile levels, and the Y-axis indicates the regression coefficients of each variable. The black dashed line indicates the
OLS regression estimates of the corresponding variable, and the area between the two dashed lines indicates the confidence interval of the OLS regression results. The
solid line corresponds to the quantile regression estimates of each variable, and the shaded area is the confidence interval of the quantile regression results.

in most countries and regions, except Europe and Central Asia. The
Table 6
asymmetric analysis shows that the inhibitory effect of natural resource
Results of the moderating effect.
exploitation on green and sustainable economic development is more
Dependent variable: LnGTFP pronounced in countries with higher GTFP than in other countries.
Variables (1) (2) Third, the results of the moderating effect suggest green finance is a
L.LnGTFP 0.876*** 0.926***
potent weapon to mitigate the inhibitory effect of NRA on GTFP.
(0.001) (0.000)
z_NRA − 0.015*** − 0.074***
(0.001) (0.003) 6.2. Policy implications
LnPGDP 0.007*** 0.007***
(0.000) (0.000) The above findings provide us with several important policy impli­
LnTRA 0.065*** 0.010***
cations as follows. First, enterprises, as practitioners, should strengthen
(0.000) (0.000)
LnREC − 0.007*** − 0.008*** the awareness of "green exploration and development" of natural re­
(0.000) (0.000) sources, adopt sustainable practices in the process of natural resources
LnGF 0.001*** 0.002*** exploitation, actively introduce high-end talents and advanced tech­
(0.000) (0.000) nologies, and reduce pollution and damage to the ecological
LnGF* z_NRA 0.004***
(0.000)
environment.
Constant − 0.198*** 0.016*** Second, the governments, as regulators, should give full play to the
(0.004) (0.003) role of macro control, improve laws and regulations related to the
Obs. 1672 1672 exploration, exploitation, transportation and use of natural resources,
AR(1) 0.0381 0.0374
and impose severe penalties for violations; they should promote the
AR(2) 0.429 0.383
Hansen 0.595 0.482 disclosure of information on the use and exploitation of natural re­
sources and implement accountability; they should strictly regulate the
Notes: Standard errors in parentheses; ***p < 0.01.
issuance of mining licenses and require miners to undergo registration
procedures; and they should strictly limit the market access conditions
out a moderating effect analysis. This study highlights the following for resource-based industries, and gradually eliminate the backward
interesting findings: production capacity of high energy consumption and high pollution.
First, our study confirms the inhibitory effect of NRA on GTFP, which Finally, financial institutions, as third parties, should strongly sup­
validates the resource curse hypothesis. Second, the results of the port the development of green finance and improve the green financial
regional heterogeneity analysis reveal that a negative relationship exists system containing important elements such as green credit, green bonds,

8
Y. Liu et al. Resources Policy 81 (2023) 103315

green funds, and green insurance. On the one hand, they should inno­ & Editing.
vate and promote the reform of a green financial management system,
steadily promote environmental information disclosure, improve the Declaration of competing interest
transparency of green financial markets, and strengthen the supervision
of financial institutions. On the other hand, they should improve the No potential conflict of interest was reported by the authors.
reward and punishment mechanism and actively guide financial re­
sources to gather in the green and low-carbon fields. Data availability
This study contributes to alleviating the natural resource curse and
promoting the green economy in the era of green finance, but the spe­ Data will be made available on request.
cific transmission mechanism of the resource curse effect is still unclear,
and a study on this may be more informative for policymakers. In Acknowledgements
addition, it is still worth exploring whether there is a nonlinear rela­
tionship between NRA and GTFP. Therefore, future research could The article is sponsored by the National Social Science Foundation of
provide an in-depth discussion on these two aspects, which could be China (Grant No. 20VGQ003). Farhad Taghizadeh-Hesary acknowl­
interesting. edges the financial support of the Grant-in-Aid for the Excellent Young
Researcher of the Ministry of Education, Culture, Sports, Science and
CRediT author statement Technology of Japan (MEXT); Grant-in-Aid for Young Scientists (No.
22K13432) of the Japan Society for the Promotion of Science (JSPS) and
Yang Liu: Data curation, Software, and Writing - Original Draft. the Grant-in-Aid for Scientific Research (B) (No. 22H03816) of the JSPS.
Jianda Wang: Validation, and Writing - Review & Editing. Kangyin The authors gratefully acknowledge the helpful reviews and comments
Dong: Conceptualization, Methodology, and Funding acquisition. Far­ from the editors and anonymous reviewers, which improved this
had Taghizadeh-Hesary: Validation, Supervision, and Writing - Review manuscript considerably. Certainly, all remaining errors are our own.

Appendix A
Table A1
Abbreviation list

Abbreviations

BRI Belt and Road Initiative

CBI Climate Bonds Initiative
DEA Data Envelopment Analysis
DMU Decision-making units
FGLS Feasible generalized least squares
GDP Gross domestic product
GML Global Malmquist–Luenberger
GMM Generalized method of moments
GTFP Green total factor productivity
IV-GMM Instrumental variable-generalized method of moments
NRA Natural resource abundance
NRD Natural resource dependence
OLS Ordinary least squares
SDGs Sustainable Development Goals
TFP Total factor productivity
WDI World Development Indicators

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