Financial development and natural resources: Does information technology moderate for financial resource blessing?
摘要
The study investigates the nexus between natural resources rents (TNRR), Information and communication technology (ICTE), economic growth (EGT), institutional quality (IQ) and financial development (FD) in Malaysia, using quarterly data from 2001Q1 to 2020Q4. Motivated by the critical role of natural resources management, digital information, and institutional strength in promoting financial sector development in Malaysian economy, this study seeks to expose the interplay between these variables. Fourier unit root tests were utilized to determine the order to integration among the variables, revealing a unique order of integration. The RALS-FARDL cointegration approach confirmed the presence of long-run nexus, which was further validated by the Bayer-Hanck combined cointegration test. To estimate the long-run elasticity, DOLS methodology was employed, identifying a resource curse for the financial sector in Malaysia. The results demonstrate that ICTE positively affects FD. Moreover, higher IQ enhances and strengthens the financial sector. Further, the positive influence of the combined effect of ICTE and natural resources further confirms that ICTE positively moderates the association between TNRR and FD. Causality analysis confirmed bidirectional causal interaction between FD and economic growth, supporting the feed-back hypothesis. The study highlights several crucial policy implications. The Malaysian government should prioritize diversifying investment beyond natural resources and reinforce the use of ICTE for conserving natural resources in such a way to leverage the financial sector. By fostering an institutional framework and investing in ICTE, Malaysia can achieve sustainable economic growth in the long-run.