Journal
RESOURCES POLICY
Volume 67, Issue -, Pages -Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.resourpol.2020.101689
Keywords
Financial development; Natural resources; Research and development; Energy prices; G-7 countries
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Funding
- National Social Science Fund of China [18BJL044]
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This study investigates the impact of natural resources in the presence of research and development and energy prices on the improvement of financial development for the Group of Seven (G7) economies for the period of 1990-2017. In doing so, the study employs a cross-sectional dependence test, Westerlund cointegration approach, and Common Correlated Effect Mean Group methods. Moreover, for robustness checks, this study uses cross-sectionally augmented ARDL (CS-ARDL) and augmented mean group (AMG) tests. Unlike previous studies, our study uses a multidimensional approach to financial development, which captures the performance, accessibility, and depth of both financial institutions and markets. The outcomes indicate that natural resource abundance for G-7 countries helps expand financial development. In contrast, rising energy prices adversely affect the expansion of financial development. However, research and development expenditures increase financial development. From the empirical findings, this study suggests the promotion of research and development expenditures, control the increasing energy prices to further benefit from the abundance of natural resources in G-7 economies.
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