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<p>This study investigates the impact of financial development on mineral resource rents in China, addressing a gap in the literature that predominantly focuses on how natural resources influence financial development. Shifting this perspective, the research reverses the conventional inquiry to examine how financial development directly affects income generation from mineral resources. Using time series data from 1980 to 2020, a financial development index was constructed through principal component analysis (PCA), and the autoregressive distributed lag (ARDL) model was applied to estimate both short- and long-run effects. The findings reveal that financial development has a negative and significant impact on mineral rents, indicating that financial sector expansion does not enhance resource rent generation. Inflation and labor participation have positive and significant effects, while the exchange rate exhibits a negative and significant influence. Additionally, Toda and Yamamoto’s causality analysis confirm a unidirectional relationship from financial development to mineral rents, reinforcing the conclusion that financial development negatively affects resource rents in China. Overall, the results indicate that financial development does not that have positive impact on mineral rents in China. These results provide new insights into the complex nexus between financial systems and resource-dependent economies, challenging the assumption that financial development universally supports economic growth through natural resources.</p>

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Does financial development have an impact on mineral resource rents? Evidence from China

  • 期刊论文

  • 发表日期：

    2025年1月20日

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  • Yongming Huang,
  • Bwimo Borniface Bebi,
  • Soukzana ladtakoun

摘要

This study investigates the impact of financial development on mineral resource rents in China, addressing a gap in the literature that predominantly focuses on how natural resources influence financial development. Shifting this perspective, the research reverses the conventional inquiry to examine how financial development directly affects income generation from mineral resources. Using time series data from 1980 to 2020, a financial development index was constructed through principal component analysis (PCA), and the autoregressive distributed lag (ARDL) model was applied to estimate both short- and long-run effects. The findings reveal that financial development has a negative and significant impact on mineral rents, indicating that financial sector expansion does not enhance resource rent generation. Inflation and labor participation have positive and significant effects, while the exchange rate exhibits a negative and significant influence. Additionally, Toda and Yamamoto’s causality analysis confirm a unidirectional relationship from financial development to mineral rents, reinforcing the conclusion that financial development negatively affects resource rents in China. Overall, the results indicate that financial development does not that have positive impact on mineral rents in China. These results provide new insights into the complex nexus between financial systems and resource-dependent economies, challenging the assumption that financial development universally supports economic growth through natural resources.