time：2022-12-01
Bofeng Xie, Mubeen Abdur Rehman, Junyan Zhang, Runze Yang
The financial management of natural resource endowments is essential for achieving sustainable economic growth. Previous studies on environmental degradation have primarily relied on CO₂ emissions or ecological footprint as single indicators, paying less attention to global environmental pollution factors such as ecological status. This study explores how the financialization of natural resources supports sustainable development goals, focusing on the top ten resource-rich countries from 1990 to 2018. Using an advanced panel Granger causality test, the findings reveal that natural resources contribute to ecological deterioration rather than improving environmental performance. In contrast, financial markets and institutions play a crucial role in mitigating the negative environmental impact of natural resources, providing solutions for regulators to simultaneously achieve economic and sustainability goals. Furthermore, the study confirms the Environmental Kuznets Curve hypothesis, suggesting that economic growth initially exacerbates pollution but eventually leads to environmental improvements after reaching a threshold level.
This study extends the existing literature in several ways. First, it employs ecological status as a measure of environmental deterioration instead of traditional greenhouse gas emissions or ecological footprint, offering a more comprehensive perspective on environmental quality. Second, it uniquely explores the bidirectional relationship between financialization (including financial markets and institutions), natural resources, GDP, and ecological status, providing new insights into natural resource financial management. Third, the study applies an advanced panel Granger causality approach, which is robust to different types of panel data and effectively addresses endogeneity issues, enhancing the reliability of causal inference. Lastly, by selecting the world’s top ten resource-rich countries as the research sample, this study systematically examines causal associations among key variables and provides policy recommendations to improve financial management of natural resources and promote environmental sustainability. These findings contribute not only to the achievement of global sustainable development goals but also to the progress toward carbon neutrality.