Resources Policy 69 (2020) 101878

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

The role of forest resources, mineral resources, and oil extraction in

economic progress of developing Asian economies
Yongming Huang a, b, Syed Muhammad Faraz Raza a, Imran Hanif c, *, Majed Alharthi d,
Qaiser Abbas e, Syed Zain-ul-Abidin a
a
Institute for Region and Urban-Rural Development, Wuhan University, Wuhan, 430072, Hubei Province, China
b
Center for Industrial Development and Regional Competitiveness, Wuhan University, Wuhan, 430072, Hubei Province, China
c
Department of Economics, School of Business Economics (SBE), University of Management and Technology, C-II Johar Town Lahore, Pakistan
d
Finance Department, College of Business, King Abdulaziz University Rabigh, P.O.BOX.344, 21911, Saudi Arabia
e
Department of Economic, Ghazi University DG Khan, Pakistan

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

Keywords: This study determines the role of natural resources’ utilization, foreign direct investment (FDI), and fossil fuel
Forest resources consumption in economic growth by utilizing panel data of 25 developing Asian countries from the period 1996
Mineral resources to 2016. Pool Mean Group (PMG) regression is used for this purpose, and the results show that the rent received
Fossil fuels
from forests has a sizeable share in the economic growth of developing Asian Countries. The study shows that an
Economic growth
Natural resources
increase in FDI is stimulating economic growth in developing countries. However, although the utilization of
natural resources has a positive impact on economic growth, the results show a statistically insignificant role of
natural resources in improving economic growth. Finally, the results show that the rent obtained from forest
resources, mineral resources, and oil extraction makes a significant contribution to economic growth. The
findings highlight that FDI and the rent received from the pool of natural resources are significant contributors to
economic growth, as they are both helping to develop industrialization in the nations concerned and improve the
level of per capita income. However, the findings also suggest that there is a need to consider the limited
availability of natural resources and to deal with this situation by (a) developing policies that can ensure the
efficient use of such rent received from the natural resources by importing advanced technologies from devel­
oped nations and (b) using the rents from natural resources to promote the business environment and attract FDI
in developing countries.

1. Introduction such as excessive reliance on resources while lacking efficiency and

In this modern era, almost every country is experiencing great
volatility in its economic affairs. In particular, the developing countries
are facing this problem because they are focused on enhancing growth.
It is true to say that, whether the country is either developed or devel­
oping, and every country wants to increase its growth to become more
stable and developed. In this race to increase growth, the emerging
nations have been found to be abundant in resources that will increase
their growth swiftly (Shahbaz et al., 2019; Cavalcanti et al., 2011). The
natural resource of oil has a comprehensive influence on the growth of
developing economies, such as Azerbaijan, Kazakhstan, Turkmenistan,
and Russia (Bildirici and Kayikci, 2013). While there are some problems,
sustainable policies to enable coordination of these resources to promote
economic growth (Khan et al., 2020; Satti et al., 2014). The developed
economies are one step ahead of developing countries because of their
sustainable resources and sustainable growth policies. Their policies
enabling proficient use of their energy and natural resources to raise
their growth level without any hazards differ from those of developing
economies (Guan et al., 2020; Apergis and Payne, 2014; Omri and
Kahouli, 2014). The focus of the present study on developing Asian
economies as the continent covers 29.4% of the Earth’s land area and
caries 60 percent of the world’s population (World Development In­
dicators, 2016). More importantly, the developing Asian regions of
South East Asia, South Asia, Central Asia, the Middle East, and Western

* Corresponding author.
E-mail addresses: hym@whu.edu.cn (Y. Huang), farazraza10@gmail.com (S.M.F. Raza), ihanif@gus.edu (I. Hanif), mdalharthi@kau.edu.sa (M. Alharthi),
qabbas@gudgk.edu.pk (Q. Abbas), thesyedzain@gmail.com (S. Zain-ul-Abidin).

https://doi.org/10.1016/j.resourpol.2020.101878
Received 25 March 2020; Received in revised form 4 August 2020; Accepted 15 September 2020
0301-4207/© 2020 Elsevier Ltd. All rights reserved.
Y. Huang et al.
Asia have been blessed with high reserves of natural resources. Almost
25 percent of the coal assets in Asia are located in East Asia and
Southeast Asia (World Energy Council, 2016). Whereas China is one of
the world’s leading mineral producers (United States Geological Survey
(USGS), 2016), central Asia is abundant in oil, gas, coal, and uranium
resources. Moreover, the South Asian Region has been blessed with
many natural resources, such as oil, gas, fertile lands, trees, and minerals
(World Development Indicators, 2016). Though the Asian countries are
rich in resources, there is a need to use these natural resources efficiently
to achieve sustainable growth.
In discussing the utilization of sustainable natural resources, one
must consider natural resource rents, which are the excess value after all
costs and returns. In this way, the surplus return of each natural resource
and its share in terms of economic growth can be dignified. The devel­
oping countries focus more on their plentiful natural resources and
earning revenues from them. In general, the natural resource rents have
enhanced economic growth (Shahbaz et al., 2019; Yuxiang and Chen,
2011). There is a need to consider that the Earth can carry limited re­
sources there is a need of use such resources in a dexterous manner, and
meanwhile it is important to explore alternative channels for economic
growth (Koitsiwe and Adachi, 2015). In this regard, foreign direct in­
vestment (FDI) is beneficial for natural resource rents to enhance the
growth of developing countries. There can be more opportunities, better
policies, and more plans by foreign investors to invest in these countries
to obtain benefits from natural resources and their rents. The positive
contribution of FDI with natural resource rents will boost economic
growth, as has happened in Malaysia (Solarin and Shahbaz, 2015).
Almost every country in all Asian regions is blessed with natural
resources. The developing countries lack resource sustainability as most
of them are abundant in non-renewable energy resources and do not use
renewable energy resources effectively to meet the criteria of resource
sustainability. The most commonly used non-renewable energy type is
fossil fuel energy. Fossil fuel energy is cheap, and it is easily available
compared to other energy resources. The emerging nations are
depending on fossil fuel energy to improve their growth in less time with
less cost. But the wasteful allocation of fossil fuel energy consumption
can be destructive for economic growth (Soytas and Sari, 2009),
whereas the sustainable use of fossil fuel energy can be productive for
the growth of developing economies. In addition, the presence of pro­
ficient natural resources and fossil fuel energy is considered to be
potentially productive for the growth of any economy that needs proper
planning and policies by policy developers (Khan et al., 2020; Mensah
et al., 2019). Over the last decade, the developing countries have been
focusing on their sustainable resources to both improve their growth and
protect their environment. In the case of developing Asian countries,
they are limited to allocating these natural resources in a productive
manner. Their allocation of natural resources, fossil fuel energy con­
sumption, and effective foreign investment to boost economic growth
are still questionable. In this regard, the primary objective of the study is
to measure the influence of natural resource rents on economic growth
in Asian regions. The second objective is to examine the influence of FDI
on economic growth, and the third objective is to determine the role of
fossil fuels energy consumption on economic growth in developing
economies of Asia. The ultimate purpose of the study is to offer policy
implications for better utilization of natural resources to foster economic
growth in the region under question. The rest of the study is divided into
the following order.
Section two exhibits the review of literature, section three presents
the methodology and data, while section four presents a concise analysis
of the obtained results. Lastly, the verdicts of the study and future im­
plications are concluded in section five.
2. Literature review
The emerging economies are experiencing great volatility in
response to improving the level of their economic growth. Their
2
Resources Policy 69 (2020) 101878
production methods are different from and far behind those of emerged
economies. Although the developing economies are clearly trying hard
to achieve preferred sustainable economic growth without any risk,
their policies are inefficient in attaining the desired economic growth.
Almost every country has several natural resources to improve its
growth level. Natural resources, such as forests, oil, natural gas, coal,
and minerals all contribute to the production processes that encourage
the growth of any economy. However, such growth will happen only if
these resources are utilized with proper planning and better policies
from policymakers. There is considerable evidence of the positive in­
fluences of natural resources on the growth of different economies. Wu
et al. (2018) determined the effect of natural resource abundance on the
growth of China. In industrial states, natural resources have an
encouraging effect on economic growth. Almost all of the BRIC (Brazil,
Russia, India, and China) countries have obtained growth benefits from
their natural resources. Russia is a resource-rich country with large
deposits of oil, natural gas, coal, and uranium ore and is also a large
exporter of mineral and energy. Its economic growth has been acceler­
ated by the efficient use of these natural resources (Danish et al., 2019).
Furthermore, the increased consumption of natural resources in Mexico,
Philippines, Singapore and South Africa has had a positive effect on
Economic Growth. Conversely, natural resources have reduced the
economic growth in some countries as Gylfason (2001) and Bulte et al.
(2005) found a negative influence of natural resources on economic
development. The dependency on natural resources has reduced the
economic growth of some resource-abundant economies (Haaparanta,
2004). Evidence of this has been presented by Papyrakis and Gerlagh
(2007), for the United States, Asekunowo and Olaiya (2012), for Nigeria,
and Ahmed et al. (2016), for Iran. According to the findings of Wu et al.
(2018), although natural resource-oriented industry has had a positive
effect on the economic growth of China, the effect has not been statis­
tically significant. Generally, it is considered that the extraction and
exploitation of natural resources are also related to economic develop­
ment (Destek and Sarkodie, 2019).
Natural resource rents are the revenue or surplus values that nor­
mally measure the share of natural resources in economic growth. An
increase in natural resource rents encourages the growth of an economy.
Oil revenue is the main source of improved economic growth in Bahrain.
The bidirectional positive causality between natural resources and
economic growth has also been shown by Hamdi and Sbia (2013). The
natural resources’ blessing hypothesis is fulfilled, as natural resources
are considered to be a blessing for economic growth (Hanif et al., 2019b;
Quixina and Almeida, 2014). According to Apergis and Payne (2014), oil
reserves have had a constructive influence on economic growth since
2003 and have led to the efficient growth of resource-rich labor
importing countries. Jovic et al. (2016) and Prljic et al. (2018) have
found that the rents from the five natural resources of oil, forests, coal,
minerals, and natural gas have greatly encouraged economic growth.
Forest rents have been shown to have the greatest effect in enhancing
GDP (Jovic et al. 2016; Prljic et al. 2018). Even a small contribution of
forest rents produces the highest positive variation in GDP. According to
Ben-Salha et al. (2018), in the long run, the supermassive effect of
natural resource rents on per capita GDP is considered as a blessing for
the economic growth of the top natural resource–abundant countries.
This positive contribution of natural resources has boosted economic
growth (Law and Moradbeigi, 2017; Ozturk, 2017; Shahbaz et al.,
2018). The oil curse phenomenon has been examined by Olayungbo
(2019), who showed that the revenues from oil resources stabilized the
economic growth of Nigeria.
Bekun et al. (2019) examined in panel studies of 16 EU countries,
natural resource rents and economic growth have a positive association
with each other. There is a bidirectional causality between economic
growth and natural resource rents in EU countries. Abdulahi et al.
(2019) analyzed the panel data of 14 Sub-Saharan African countries.
They found that the natural resource rents have a positive constructive
effect on economic growth when the Institutional Quality (IQ) level is
Y. Huang et al.
above the threshold level, whereas the effect is negative when the IQ
level is below the threshold level. Natural resource rents are considered
as being national wealth. Sinha and Sengupta (2019) study in the case of
30 Asia-Pacific countries showed that natural resource rents promoted
human development, whereas, at the global scale this positive effect
turns negative. Moreover, rents from natural resources such as oil, gas,
forests, and minerals enhance economic development (Sinha and Sen­
gupta, 2019). Zalle (2019) study analyzed panel data of 29 African
countries, after controlling for internal conflicts, the direct and indirect
influences of natural resource rents on economic growth are observed to
be positive. Natural resource rents fail to coordinate with the growth of
some economies and impede their economic growth (Auty, 2001; Sachs
and Warner, 2001; Frankel, 2010; Azerki and Bruckner, 2011; Apergis
and Payne, 2014; Khan et al., 2020). In a panel study of 99 countries, a
slow growth process is recorded in resource-abundant countries as
compared to poor developing countries and there is a negative influence
of total natural resource rents on economic growth (Farhadi et al.,
2015). Natural resource rents, such as those from oil, have the same
undesirable influence on the economic growth of Argentina (Ozturk,
2017).
FDI is considered as an important indicator to encourage the efficient
use of natural resources and to build up economic growth. There is some
evidence of the positive contribution of FDI in terms of economic growth
(Asafu-Adjaye, 2000; Gao, 2005; Adams, 2009; Anwar and Sun, 2011).
In panel studies, FDI has been shown to promote the growth of Asian
economies (Tiwari and Mutascu, 2011). In the case of BRIC countries,
FDI does not cause economic growth (Pao and Tsai, 2011). In the cases
of small open economies like Ghana, the Gambia, and Sierra Leone, and
of the G20 countries, FDI shows positive relationship with economic
growth (Adeniyi et al., 2012; Lee, 2013). According to Apergis and
Payne (2014), FDI has made a great contribution to oil reserves to
improve economic growth in MENA (Middle East and North Africa)
countries. Omri and Kahouli (2014) analyzed a panel data of 65 coun­
tries, the results showed that FDI and energy resources boost the growth
of high-income countries. Bidirectional causality is found from eco­
nomic growth to FDI and energy resources in middle-income countries
and from economic growth to FDI in low-income countries. Shahzad
et al. (2015) examined the long-term improvement in economic growth
from increased remittances and FDI in South Asia. There is also a posi­
tive indication from FDI to economic growth in Latin America and
bidirectional causality between economic growth, energy resources, and
FDI inflows in MINT (Mexico, Indonesia, Nigeria, and Turkey) countries,
respectively (Sapkota and Bastola, 2017; Lin and Benjamin, 2018).
Consumption of fossil fuel energy, which comes from non-renewable
resource, is prevalent worldwide and has a great impact on growth and
other factors. The ineffective use of fossil fuel energy has a bad effect on
economic growth, as shown by Soytas and Sari (2009). Lotfalipour et al.
(2010) reported that there is no causality running from fossil fuel to
economic growth in Iran. There is a non-linear relationship between
greenhouse gas emissions and economic growth. There is one-way
causality running from energy consumption and economic growth to
greenhouse gas emissions (Hamit-Haggar, 2012). In the presence of oil
reserves, fossil fuel energy consumption has increased economic growth
in Bolivia, Chile, Colombia, and Venezuela and impeded economic
growth in Argentina and Peru (Ozturk, 2017). A panel study of 22 Af­
rican countries showed that oil prices and fossil fuel energy consumption
promoted the economic growth of oil-exporting and oil-importing Af­
rican countries (Mensah et al., 2019). In the case of France, there is an
insignificant relationship between fossil fuel energy consumption and
economic growth (Mohamed et al., 2019). Fossil fuel energy consump­
tion is related to non-renewable energy consumption. In the case of
Asia-Pacific countries, non-renewable energy consumption improved
economic growth (Zafar et al., 2019).
The brief review of past studies related to natural resources, natural
resources’ rents, FDI, fossil fuel energy consumption, and their contri­
butions in terms of economic growth, has revealed mixed effects of all
3
Resources Policy 69 (2020) 101878
factors on economic growth. Overall, these findings are not clear and are
confusing. Especially in the case of Asian countries, there is a need for
some more comprehensive research to measure the effects of natural
resource rents, FDI, and fossil fuel energy consumption on economic
growth. Thus, the present study is important in determining the influ­
ence of resource rents’ utilization, FDI, and fossil fuel consumption on
the economic growth of Asian countries.
3. Data, empirical model, & methodology
3.1. Data Sources
The panel data country list consists of 25 countries from South East
Asia, Central Asia, the Middle East, and Western Asia. The countries are
selected based on their income levels. The lower-middle-income and
upper-middle-income countries such as Cambodia, China, Indonesia,
Malaysia, Mongolia, Myanmar, Philippines, Thailand, Vietnam,
Bangladesh, Bhutan, India, Nepal, Pakistan, Sri Lanka, Kazakhstan,
Kyrgyz Republic, Tajikistan, Uzbekistan, Egypt Arab Rep., Iran Islamic
Rep., Jordan, Lebanon, Turkey, and Yemen are chosen from Asian re­
gions. The panel data of selected variables are collected from 1995 to
2016. Economic growth is taken as the dependent variable and is
measured as GDP growth (annual %). Six independent variables are
selected to analyze their influence on economic growth. Fossil fuel en­
ergy consumption is a type of non-renewable energy consumption; the
measuring unit is Fossil fuel energy consumption (% of the total energy
consumption). FDI is taken as net inflows (% of GDP). Four types of
natural rents are taken: total natural rents (% of GDP), Mineral rents (%
of GDP), Forest rents (% of GDP), and Oil rents (% of GDP). Data Sources
are World Development Indicators by World Bank (2018), the UNCTAD
Statistical database for FDI, the International Energy Agency, Energy
balances for oil resources and World Energy Council (2016).
3.2. Empirical model and methodology
Natural resource rents are considered as a productive source for
enhancing economic growth. FDI and fossil fuel energy consumption are
also active indicators of promoting economic growth. According to the
theoretical background, natural resources’ utilization, fossil fuel energy
consumption, and FDI have positive associations with economic growth.
Natural resource rents are in the form of forest rents, mineral rents, oil
rents, and total natural rents. The revenue from all these types of rents
will promote the economic growth of developing Asian countries. The
econometric model of natural resource utilization, FDI, fossil fuel energy
consumption, and economic growth is given below in Eqn. 1:
GDPG ​ = ​ f ​ (FOR_R, ​ FFEC, ​ FDI, ​ MIN_R, ​ NAT_R, ​ OIL_R) (1)
The above functional equation is based on the study by Zafar et al.
(2019) of economic growth as a function of forest rents, fossil fuel en­
ergy consumption, FDI, mineral rents, total natural resource rents, and
oil rents. The linear growth equation (Eqn. 2) for the empirical analysis
is also based on Zafar et al. and is given below:
GDPGit ​ = ​ α0 ​ + ​ α1 FOR_Rit ​ + ​ α2 FFECit ​ + ​ α3 FDIit ​
+ ​ α4 MIN_Rit ​ + ​ α5 NAT_Rit ​ + ​ α6 OIL_Rit ​ + ​ εi (2)
In the above linear equation, t denotes time, i denotes for countries,
α0 is the intercept and α1 …. …. … α6 are the coefficients. The equation is
for empirical analysis to measure the influence of resource rents, fossil
fuel energy, and FDI on economic growth in the long run.
3.2.1. Descriptive statistics
The descriptive statistics describe the credibility of variables and the
overall fitness of the empirical model. The descriptive statistics are
based on mean, median, maximum, and minimum values of variables,
and the standard deviation is used to measure the variations. This
Y. Huang et al. Resources Policy 69 (2020) 101878

summary also describes the overall fitness of the model. While to

identify the pairwise correlation of the variables and problem of mul­ GDPGit ​ = ​ βi ​ + ​ γit ​ + ​ α1 FOR_Rit− 1 ​ + ​ α2 FFECit− 1 ​ + ​ α3 FDIit− 1 ​
ticollinearity, the correlation matrix shows the strength of the bond of + ​ α4 MIN_Rit− 1 ​ + ​ α5 NAT_Rit− 1 ​ + ​ α6 NAT_Rit− 1 ​ + ​ εit
two variables with each other’s, while the high dependency on each (5)
other’s moves them onto the multicollinearity problem which is detec­
In the above equation, i denotes the number of countries, t denotes
ted by correlation matrix. With respect to detecting the severity of
the time period, and βi and γit are country fixed effects and deterministic
multicollinearity, the Vector Inflation Factor (VIF) is used for Ordinary
trends respectively. Meanwhile, εit is a residual that shows the deviation
Least Square (OLS) regression analysis.
from long-run correspondence. The null hypothesis of cointegration ρi =
1 is tested via the estimated residual, which is given below in Eqn. 6:
3.2.2. Panel unit root test
The unit root test of stationarity is performed to identify the order of εit ​ = ​ ρi ​ εit− 1 ​ + ​ μit (6)
integration of variables of the empirical model. The unit root shows
The above equation (4) is based on the work of Hamit-Haggar
which technique is suitable for further empirical analysis. The panel unit
(2012), Apergis and Payne (2014), and Shahzad et al. (2015). Total
root test consists of two tests, the LLC (Levin, Lin & Chu) and IPS (Im,
seven statistics are used by Pedroni (1999, 2004) to test cointegration.
Pesaran & Shin) tests. The LLC test is an extension of the Augmented
The Pedroni cointegration test contains two sets of cointegration: within
Dickey-Fuller (ADF) test. Heterogeneity was not dealt with in the ADF
dimension (includes 4-panel statistics: Panel v, Panel rho, Panel PP, and
test, whereas the LLC test allows for heterogeneity by unit-specific fixed
Panel ADF) and between dimension (includes 3 group statistics: Group
effect and dependent lag coefficients listed as homogeneous in all units
rho, Group PP, and Group ADF). The null hypothesis is recorded above
(Levin et al., 2002). Meanwhile, the IPS test is an extension of the LLC
as ρi = 1, whereas the alternative hypothesis of within dimension is ρi =
test, as it as it removes the restrictions of the assumptions of the LLC test.
There are null and alternative hypotheses. All series being
ρ < 1 for all i’s, and that of between dimension is ρi < 1 for every value of
i. To accept the alternative hypothesis for the existence of cointegration
non-stationary is the null hypothesis, and all series being stationary is
and of the long-run relationship, the null hypothesis of no cointegration
the alternative hypothesis. Following Shahzad et al. (2015), the equa­
should be rejected. This is possible only if the calculated value of test
tion (Eqn. 3) of the panel unit root test for IPS is as follows:
statistics should be less than the critical value. If it is possible, then it is
p
∑ clear that natural resource rents (forest rents, total natural resource
△yit ​ = ​ αi ​ + ​ ρi Yit − 1 ​ + ​ ij ​ △yit − ​ + ​ εit (3)
j=1
j
rents, mineral rents, and oil rents), fossil fuel energy consumption, FDI,
and economic growth are cointegrated and that there is long-term ex­
Yit denotes the variables in the panel model, it denotes the country and istence between them.
time period, i = 1, 2, … … …, N and t = 1, and 2, … … …T. t-1 is the
previous year effect, αi is the fixed effect. ρ is added for the hypotheses: 4. Results and discussion
ρi = 0 is for the null hypothesis and ρi < 0 is for the alternative hy­
pothesis. After the ADF unit root test, how to calculate the ADF t-statistic In this section, we analyze the utilization of natural resource rents,
is given below: fossil fuel energy, and FDI on the economic growth of developing Asian
countries. The first step of the empirical analysis contains a summary of
1 ∑ the descriptive statistics. The descriptive statistics consist of two parts:
N
t​ = ​ tiT(Pi) (4)
N i=1 in the first part, the overall fitness of the empirical model is assessed, as
shown in Table 1.
In the above equation, tiT denotes the ADF t-statistic of a specific
The variation of variables from their mean point is highlighted by the
country, and i denotes the country. The t-statistic is normally distributed
standard deviation. Each variable has logical variations, and fossil fuel
under H0, and critical values for specified values of N and T are provided
energy consumption has the highest standard deviation value, which
by Im et al. (2003).
refers to the extent of variation in fossil fuel energy from its mean point
(see Figs. 1–6).
3.2.3. Cross-sectional dependence test
Overall, this attribute shows that the empirical model is fit and that
The unit root test involves two steps: the first is to identify the order
we can proceed to the second step of the descriptive statistics. The
of integration among variables and the second is to detect the serial
second step is based on the pairwise correlation matrix and the Variance
dependency of variables. It is assumed that there should be serial
Inflating Factor (VIF). Both tests are applied to the model to detect
dependence among variables. To justify this assumption, the Pesaran
multicollinearity.
cross-sectional dependence (CD) test (Pesaran, 2004) is applied to the
In Table 2 of the correlation matrix, all variables have a weak cor­
model. If this assumption is not valid and some cross-sectional inde­
relation with economic growth. Forest rents, FDI, mineral rents, and
pendence is found, there will be serious problems of spurious results. To
natural rents have a weak positive relationship with economic growth,
avoid this problem, the Pesaran CD consists of a null hypothesis of
whereas fossil fuel energy consumption and oil rents are found to have
cross-sectional independence that should be rejected (Hamit-Haggar,
negative and weak relationships with economic growth. All correlation
2012; Shahzad et al., 2015).
values are below the critical value of 0.80, which illustrates the weak
relationship among the dependent and independent variables in the
3.2.4. Cointegration test
model.
We have applied the Pedroni cointegration test (Pedroni, 1999,
In Table 3 of the variance inflation factor matrix, VIF detects the
2004). The Pedroni co-integration test allows the existence of long-run
severity of multicollinearity in an OLS regression analysis. It estimates
relationships and cross-sectional interdependence along with different
the increase in the variance of the evaluated regression coefficient
individual effects, such as fixed effects and deterministic trends. The
because of collinearity. VIF follows the rule of thumb; VIF greater than
Pedroni co-integration equation is based on Hamit-Haggar’s (2012)
10 detects high multicollinearity. In Table 3, all variables show an in­
greenhouse gas, energy consumption and economic growth
crease in variance that is less than 10. So, there is no problem of mul­
co-integration analysis, Apergis and Payne’s (2014) energy–growth
ticollinearity. The results of the VIF matrix indicate a slight increase in
nexus, and Shahzad et al.’s (2015) remittances, FDI, and economic
the variance of all variables, which means that all variables have a weak
growth cointegration analysis. The Pedroni cointegration equation (Eqn.
relationship with each other.
5) is given below:
In Table 4 of the panel unit root test, the order of integration among

4
Y. Huang et al. Resources Policy 69 (2020) 101878

Table 1
Descriptive statistical summary.
GDPG FOR_R FFEC FDI MIN_R NAT_R OIL_R

Mean 5.556 0.879 76.892 3.385 1.289 1.567 4.589

Median 5.864 0.216 82.325 2.729 0.388 0.537 1.706
Maximum 14.231 9.333 99.672 17.131 11.510 22.589 32.640
Minimum − 13.126 0.000 20.879 − 2.757 0.000 0.000 0.000
Std. Dev. 3.764 1.624 22.248 2.988 2.033 3.540 6.718
Observations 550 550 550 550 550 550 550

Fig. 1. Variation between GDP Growth and Forest Resources. Fig. 4. Variation between GDP Growth and Mineral Resources Rent.

Fig. 2. Variation between GDP Growth and Fossil Fuels Extraction.

Fig. 5. Variation between GDP Growth and Natural Resources Rent.

Fig. 3. Variation between GDP Growth and Foreign Direct Investment.

Fig. 6. Variation between GDP Growth and Oil Resources Rent.

5
Y. Huang et al. Resources Policy 69 (2020) 101878

Table 2
Results of correlation matrix.
GDPG FOR_R FFEC FDI MIN_R NAT_R OIL_R

GDPG 1.000
FOR_R 0.254 1.000
FFEC − 0.244 − 0.381 1.000
FDI 0.169 0.000 − 0.007 1.000
MIN_R 0.057 − 0.269 0.150 0.296 1.000
NAT_R 0.108 0.0182 0.214 − 0.141 0.389 1.000
OIL_R − 0.06 − 0.130 0.438 0.038 0.006 0.085 1.000

variables refers to apply the cointegration on the empirical model of

Table 3
natural resource utilization, fossil fuel energy consumption, FDI, and
Vector inflation factor (VIF)Matrix.
economic growth. Hamit-Haggar (2012) applied the LLC and IPS tests on
GDPG FOR_R FFEC FDI MIN_R NAT_R OIL_R an empirical model to detect the stationarity between the variables used
GDPG 1.000 in the model. The unit root test result referred to the cointegration by
FOR_R 1.069 1.000 detecting first-order integration I (1) among variables which is also
FFEC 1.063 1.170 1.000
inspected by Shahzad et al. (2015). After the integration of variables at
FDI 1.029 1.001 1.024 1.000
MIN_R 1.003 1.078 1.023 1.096 1.000 the same level I (1) and selection of cointegration to apply in the model
NAT_R 1.012 1.000 1.048 1.020 1.178 1.000 of the relationship between natural resource rents, fossil fuel energy,
OIL_R 1.004 1.017 1.238 1.001 1.000 1.007 1.00 FDI, and economic growth in developing Asian countries, it is important
step to check the cross-section dependence among variables.
The results in Table 5 are based on the Breusch–Pagan LM test, the
Table 4 Pesaran scaled LM test, the Bias-corrected scaled LM test, and the
Panel unit root test. Pesaran CD test. The results of the Breusch–Pagan LM test do not show
Variables At Level At 1st Difference Conclusion any heteroscedasticity problem. There is no problem with bias, which is
commonly detected in OLS regression analysis. The bias is corrected by
Intercept Intercept Intercept Intercept
& Trend & Trend
Bias-corrected scaled LM. The Pesaran CD test, and another test pro­
posed by Persaran and Yamagata ascertain the CD in residuals (Pesaran,
GDPG LL − 15.18 − 12.42 I (1)
– –
2004; Pesaran and Yamagata, 2008). The dependency of cross-sections
& (0.00) (0.00)
C depends on the rejection of the null hypothesis: no CD (correlation) in
IPS – – − 15.59 − 12.72 I (1) residuals. The rejection of the null hypothesis establishes the presence of
(0.00) (0.00) CD in the panel; there is some supporting evidence of this from past
FOR-R LL – – − 13.72 − 11.41 I (1) studies (Hamit-Haggar, 2012; Shahzad et al., 2015; Zafar et al., 2019).
(0.00) (0.00)
Next, Table 6 shows the findings of Pedroni residual cointegration
&
C
IPS – – − 8.44 − 5.75 I (1) and Westerlund (2008) cointegration tests. The Pedroni cointegration
(0.00) (0.00) test is applied both to measure the long-term existence and detect the
FFEC LL – – − 6.31 − 3.81 I (1) cointegration among variables. It detects the cross-sectional interde­
(0.00) (0.00)
&
pendency in the model along with fixed effect and deterministic trend.
C
IPS – – − 7.92 − 5.82 I (1) There is a need to reject the null hypothesis: there is no cointegration
(0.00) (0.00) either within dimension or between dimension with seven equations
FDI LL – – − 8.68 − 5.74 I (1) (four for within dimension and three for between dimension) (Pedroni,
& (0.00) (0.00) 1999, 2004). The results in Table 6 show the two cointegration equa­
C
IPS – – − 11.02 − 7.98 I (1)
tions — within dimension and between dimension — rejecting the null
(0.00) (0.00) hypothesis. The Panel PP statistic and the Group PP statistic reject the
MIN_R LL – – − 7.96 − 6.11 I (1) null hypothesis at the one percent level of significance, whereas the
& (0.00) (0.00) Panel ADF statistic and the Group ADF statistic reject the null hypothesis
C
at the five percent significance level and detect the cointegration in the
IPS – – − 8.43 − 6.00 I (1)
(0.00) (0.00) panel. The results of Westerlund cointegration test also reject the null
NAT_R LL – – − 13.34 − 12.17 I (1) hypothesis and confirm the presence of cointegration in the proposed
& (0.00) (0.00) model. It can be observed that the VR statistic rejects the null hypothesis
C of no cointegration. This implies all panels are cointegrated since the
IPS − 11.21 − 9.82 I (1)
p-value of 0.04 < 0.05 level of significance. The presence of
– –
(0.00) (0.00)
OIL_R LL – – − 12.70 − 11.68 I (1)
& (0.00) (0.00)
C Table 5
IPS – – − 11.04 − 10.03 I (1) Residual cross-section dependence test.
(0.00) (0.00)
Cross-sections included: 25; No of Observations: 524 (Unbalanced)

Test Statistic df. Prob.

variables is detected by LLC and IPS tests, as designed by Levin et al.
Breusch-Pagan LM 214.179*** 105 0.000
(2002) and Im et al. (2003). The order of integration is based on a hy­ Pesaran scaled LM 6.499*** 0.000
pothesis: the null hypothesis refers to non-stationarity among variables, Bias-corrected scaled LM 6.141*** 0.000
and the alternative hypothesis refers to stationarity. Both the LLC and Pesaran CD 4.099*** 0.000
IPS tests accept the alternative hypothesis and find stationarity among Pesaran and Yamagata 2.918*** 0.004

the variables. The LLC and IPS tests show that all the variables are in­ Null Hypothesis: No cross-section dependence (correlation) in residuals and ***
tegrated at first order I (1). The stationarity at first difference among all indicates the significance at 1% level.

6
Y. Huang et al. Resources Policy 69 (2020) 101878

Table 6 Table 8
Pedroni residual and westerlund cointegration tests. Long run coefficients based on Pool Mean Group (PMG).
Series: GDPG, FOR_R, FFEC, FDI, MIN_R, NAT_R, OIL_R Dependent Variable: D.GDPG

Cross-sections included: 25 in non-parametric (PP) test; 24 parametric (ADF) test Coef. Std. Err. z-stat. p-value

Statistic Prob Weighted Statistic Prob FOR_R 0.526*** 0.206 2.55 0.011
FFEC 0.074*** 0.032 2.32 0.021
Panel v-Statistic − 0.073 0.529 − 2.935 0.998
FDI 0.204*** 0.055 3.71 0.000
Panel rho-Statistic 1.374 0.915 2.456 0.993
MIN_R 0.153* 0.089 1.72 0.084
Panel PP-Statistic − 7.499*** 0.000 − 4.798*** 0.000
NAT_R 0.065 0.084 0.78 0.438
Panel ADF-Statistic − 1.946** 0.025 − 2.303** 0.010
OIL_R 0.337*** 0.075 4.48 0.000
Alternative hypothesis: individual AR coefs. (between-dimension)
Note: *** indicates 1% and ** indicates 5% and * indicates 10 percent signifi­
Statistic Prob cance levels respectively.
Group rho-Statistic 3.989 1.000
Group PP-Statistic − 7.795*** 0.000 (FOR_R) have a positive and significant influence on economic growth in
Group ADF-Statistic − 1.943** 0.026
developing Asian countries. The value 0.52, significant at one percent,
Westerlund Test for Cointegration shows that a one-unit increase in forest rents increases the economic
H0: No Cointegration Number of Panels = 25 growth of developing Asian countries by approximately half a unit. In
Ha: Some Panels are Cointegrated Number of Periods = 22
Asian regions, revenues from forest rents make a greater contribution to
Cointegration Vector: Panel specific Time trend: Not included economic growth than do revenues from other natural resources and
Panel means: Included AR parameter: Panel specific results endorse the finding of Jović et al. (2016) and Prljic et al. (2018).
Statistic p-value Consumption of energy from a non-renewable fossil fuel resource (FFEC)
has a positive effect on economic growth and the effect is significant and
Variance Ratio (VR) − 1.723** 0.042
results are in lined with the findings of Hanif (2017) and Hanif et al.,
Null Hypothesis: No cointegration; Trend assumption: No deterministic trend. (2019a). The consumption of fossil fuels has a positive effect on the
***indicates the significance at 1% level and ** indicates the significance level at economy of Asian countries; however, developing countries are now
5%. turning toward using renewable energy resources, which may explain
the significance of fossil fuels may reduce in the future. The FDI value is
cointegration shows the long-term relationship of independent variables 0.204, significant at one percent, meaning that a units increase of FDI
with the dependent variable in the empirical model (Hamit-Haggar, makes a contribution to economic growth of approximately 0.204 units.
2012; Apergis and Payne, 2014; Shahzad et al., 2015). The positive association between FDI and economic growth has been
Furthermore, the Standard Delta test proposed by Pesaran and shown by some past studies such as Adams (2009), Anwar and Sun
Yamagata (2008) and a HAC robust test by Blomquist and Westerlund (2011), Omri and Kahouli (2014) and Shahzad et al. (2015). Though FDI
(2013) is applied to test the slope heterogeneity. The results are given in is contributing to economic growth in the right way, there is a need for
Table 7. some constructive implementation and planning to attract more foreign
The results are rejecting the null hypothesis at a level of 5% and delta investment to increase growth.
statistics are sufficiently large to reject the null of slope homogeneity. The mineral rents (MIN_R) coefficient value is 0.15, significant at ten
Therefore, in the present study, we are selecting a mean group estimator percent. The one-unit increment in revenues from mineral resources has
which allowing for heterogeneous slopes. The null hypothesis of ho­ increased the economic growth of developing Asian countries approxi­
mogeneity is also tested through Hausman Type-test to develop a com­ mately 0.15 units. Mineral rents contribute less than forest rents, but
parison between Mean Group (MG) and Pool Mean Group (PMG) their progressive role boosts the economy of developing countries. Prljic
estimators. The result shows the p-value 0.65 which is greater than 0.05, et al. (2018) and Sinha and Sengupta (2019) also reported the positive
the findings do not reject the null hypothesis and show that PMG is the contribution of mineral rents to economic growth. Russia is the largest
most efficient estimator as compare to MG estimator. In the second step, exporter of mineral resources and earns effective revenues to contribute
we developed a comparison between Dynamic Fixed Effect (DFE) and to economic growth (Danish et al.,2019). Total natural resources rents
PMG estimators by applying Hausman Type-test. The results show p- (NAT_R) have no significant effect on economic growth and endorse the
value 0.21 > 0.05 and do not reject the null which indicates that PMG is findings of Sinha and Sengupta (2019). The effect of mineral resource
the most efficient estimator as compare to DFE (see Appendix 1). In rents is positive for economic growth, but the natural resources rent
nutshell, the diagnostic tests indicate that Pool Mean Group is the best effect is not visible for the economic growth of developing Asian coun­
estimator to estimate robust results. Therefore, long-run coefficients tries. The reason for this may be that the abundance of different natural
based on the PMG estimator are given in Table 8. resources leads to inefficient and excessive utilization of resources in
Table 8 is based on the long-term results of PMG. Forest rents each country and produce an insignificant effect on economic growth.
The oil rents (OIL_R) coefficient value is 0.33, which is also significant
Table 7 and shows an effective positive contribution to economic growth in
Results of standard delta test and a HAC robust test. developing Asian economies. The results are in line with the empirical
The Standard Delta Test findings of Cavalcanti et al. (2011), Bildirici and Kayikci (2013), Jovic
et al. (2016) and Olayungbo (2019). Oil rents make a greater contri­
Delta p-value
bution to economic growth than do mineral rents. As most Asian
4.324 0.000 countries are rich in terms of oil resources, oil revenues have a great
5.420 (adj.) 0.000
influence on economic growth. PMG findings have revealed the prolific
Here H0: slope coefficients are homogenous and Variables partialled out: constant
influence of fossil fuel energy, forest rents, mineral rents, oil rents, and
A HAC Robust Test
FDI on long-term economic growth in developing Asian countries.
Delta p-value
Meanwhile, total natural resources’ rents fail to coordinate with eco­
6.527 0.000 nomic growth in the long-term. The short-run estimates based on PMG
8.181 (adj.) 0.000
are given in Table 9.
Here H0: slope coefficients are homogenous; Variables partialled out: constant. In Table 9, the results show the error correction term (ECT) with a
HAC Kernel: bartlett; with average bandwidth 1.96.

7
Y. Huang et al. Resources Policy 69 (2020) 101878

Table 9 these natural resources boost the economic growth. Meanwhile, FDI is
Short-run coefficients based on Pool Mean Group (PMG). also considered as a helpful indicator for the growth generation process
Dependent Variable: D.GDPG in developing Asian countries. The findings of this study show the sig­
nificant contribution of fossil fuels energy, forest rents, mineral rents,
Coef. Std. Err. z-stat. p-value
and oil rents to the economic growth of developing Asian countries in
ECT − 0.646*** 0.064 − 10.00 0.000 the long-term. In contrast, natural resources rent fails to show a signif­
FOR_R D1. 12.808 35.456 0.36 0.718
FFEC D1. 0.107 0.640 0.17 0.867
icant relationship with economic growth and is found to be trivial fac­
FDI D1. 0.189 0.124 1.51 0.130 tors for the economic progress of developing Asian countries. In the end,
MIN_R D1. 4.457 4.771 0.93 0.350 we suggest that the developing Asian countries should be more focused
NAT_R D1. − 17.348 19.570 − 0.89 0.375 on their forest, mineral, and oil resources to enable them to get high
OIL_R D1. − 23.990 26.921 − 0.89 0.373
returns from these resources. We find that the united effect of total
cons − 1.581** 0.821 − 1.93 0.054
natural resources is not satisfactory. So, there is a need for be some
Note: *** indicates 1% and ** indicates 5% and * indicates 10 percent signifi­ comprehensive policies and hard thinking to use these natural resources
cance levels respectively. in combination to generate high revenues. There is also a need to think
on alternative energy resources and a greater reliance on renewable
negative value of − 0.64 implies that there is cointegration at a 1% level energy resources is a prerequisite for sustainable growth. We also sug­
of significance. The negative sign of ECT also highlights that the short- gested that there is a need for some comprehensive planning to attract
run estimates are converging towards long-run estimates to attain the foreigners to expend their inflows in developing Asian countries, which
equilibrium with the pace of 64% annually. Here, it is important to will contribute greatly to the economic growth of developing Asian
mention that there is an assumption of PMG that the short-run co­ countries. Finally, we suggest the need to revisit excessive use of natural
efficients are not the same across the country because the countries are resources to improve economic growth in developing countries, there is
heterogeneous, though the selected Asian economies may have some­ need to focus on technological innovations and advancement of human
thing common to them, thus the short-run results based on individual capital, as they are already contributing to economic growth. In short,
cross-section are given in Appendix 2 Table A and B. the policy framework related to technological innovations should be
sustained and the advancement of human capital should be the primary
5. Conclusion and recommendations focus of developing nations. By implementing such programs, they can
sustain the pressure on natural resources in the developing economies.
This research of natural resource rents in the form of forest, mineral,
oil and natural rents, fossil fuel energy, foreign direct investment (FDI),
and economic growth in developing Asian countries is of great signifi­ Declaration of competing interest
cance. We are aware of the fact that natural resources are essential for
the growth of any developing country. The revenues generated from None.

Appendix 1

a) Perform Hausman Test (1978) between MG and PMG

Test the null hypothesis of homogeneity through Hausman Type-test, based on the comparison between the Mean Group (MG) and Pool Mean
Group (PMG) estimators.
Decision: Reject null hypothesis if p-value < 0.05.

Table A
Results of Hausman Test (1978) between MG and PMG.

(b) mg (B) Pmg (b-B) Difference Sqrt (diag. (V_b-(V_B)) S.E.)

FOR_R 54.822 − 0.526 55.349 72.772

FFEC − 0.481 0.074 − 0.555 1.119
FDI 0.430 0.204 0.225 0.390
MIN_R − 1.763 − 0.009 − 1.753 9.366
NAT_R − 285.258 0.065 − 285.324 448.281
OIL_R − 55.109 0.337 − 55.447 112.686
b – consistent under H0 and Ha, obtained from xtpmg
B – inconsistent under Ha, efficient under H0, obtained from xtpmg
Test: H0: difference in coefficients not systematic.
chi2 (6) – 4.16
Prob>chi2 – 0.654
Comparing MG and PMG, with the Hausman test above, PMG is selected since the p-value of 0.6547 is greater than 0.05. Here, we do not
reject the null hypothesis which shows that PMG is the most efficient estimator under the null.

b) Perform Hausman Test (1978) between DFE and PMG

Test the null hypothesis of homogeneity through Hausman Type-test, based on the comparison between the Dynamic Fixed Effect (DFE) and Pool
Mean Group (PMG) estimators.
Decision: Reject null hypothesis if p-value < 0.05.

8
Y. Huang et al. Resources Policy 69 (2020) 101878

Table B
Results of Hausman Test (1978) between DFE and PMG.

(b) Mg (B) Pmg (b-B) Difference Sqrt (diag. (V_b-V_B)) S.E.

FOR_R 0.018 − 0.526 0.545 0.326

FFEC − 0.023 0.074 − 0.098 0.059
FDI 0.232 0.204 0.028 0.054
MIN_R 0.035 − 0.009 0.045 0.106
NAT_R 0.101 0.065 0.035 0.157
OIL_R 0.316 0.337 − 0.020 0.031
b – consistent under H0 and Ha, obtained from xtpmg
B – inconsistent under Ha, efficient under H0, obtained from xtpmg
Test: H0: difference in coefficients not systematic
chi2 (6) – 8.44
Prob>chi2 – 0.207
Comparing DFE and PMG, with the Hausman test above, PMG is selected since the p-value of 0.2076 is greater than 0.05. Here, we do not
reject the null hypothesis which shows that PMG is the most efficient estimator under the null.

Appendix 2

The results of each cross-section based on Pooled Mean Group (PMG) regression are given in Table C.

Table C
Pooled Mean Group Regression (Estimate results saved as PMG)

Avg. = 21.0 Number of obs = 525

max = 21 Number of groups = 25
Log Likelihood = − 1002.747 Obs. per group: min = 21

Dependent Variable: D.GDPG

Independent Variables Coef. Std. Err. z-stat. p-value

Country 1: Cambodia
ECT − 0.566 0.107 − 5.28 0.000
FOR_R − 1.458 0.383 − 3.81 0.000
FFEC 0.862 0.173 4.96 0.000
FDI − 0.151 0.165 − 0.91 0.360
MIN_R – – – –
NAT_R – – – –
OIL_R – – – –
C 2.343 1.012 2.31 0.021
Country 2: China
ECT − 0.451 0.126 − 3.58 0.000
FOR_R 1.242 3.195 0.39 0.697
FFEC 1.053 0.312 3.37 0.001
FDI 0.615 0.455 1.35 0.177
MIN_R 0.382 0.411 0.93 0.353
NAT_R 2.393 11.051 0.22 0.829
OIL_R − 0.632 0.460 − 1.37 0.170
C 0.390 1.296 0.30 0.763
Country 3: Indonesia
ECT − 0.227 0.109 − 2.09 0.037
FOR_R − 12.912 1.517 − 8.51 0.000
FFEC − 0.798 0.412 − 1.93 0.053
FDI 0.420 0.304 1.38 0.167
MIN_R − 0.875 0.591 − 1.48 0.139
NAT_R − 2.737 1.772 − 1.54 0.122
OIL_R 0.343 0.338 1.02 0.310
C − 0.568 0.588 − 0.97 0.334
Country 4: Malaysia
ECT − 1.120 0.144 − 7.76 0.000
FOR_R − 0.476 0.477 − 1.00 0.319
FFEC 4.794 1.236 3.88 0.000
FDI 0.795 0.304 2.61 0.009
MIN_R − 10.701 5.081 − 2.11 0.035
NAT_R 2.050 1.009 2.03 0.042
OIL_R 0.380 0.350 1.09 0.278
C − 4.102 3.739 − 1.10 0.273
Country 5: Mongolia
ECT − 0.781 0.190 − 4.11 0.000
FOR_R 3.312 4.260 0.78 0.437
FFEC 0.264 0.461 0.57 0.567
FDI 0.008 0.079 0.11 0.912
MIN_R 0.254 0.147 1.73 0.083
NAT_R – – – –
OIL_R 1.715 1.186 1.44 0.148
C − 1.870 2.579 − 0.73 0.468
(continued on next page)

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Y. Huang et al. Resources Policy 69 (2020) 101878

Table C (continued )
Country 6: Myanmar
ECT − 0.087 0.117 − 0.75 0.455
FOR_R − 0.341 0.406 − 0.84 0.402
FFEC 0.135 0.123 1.10 0.272
FDI − 0.277 0.401 − 0.69 0.489
MIN_R − 2.662 2.806 − 0.95 0.343
NAT_R 0.344 0.647 0.53 0.594
OIL_R 0.208 1.305 0.16 0.873
C 0.761 1.187 0.64 0.521
Country 7: Philippines
ECT − 0.871 0.208 − 4.18 0.000
FOR_R − 1.674 4.912 − 0.34 0.733
FFEC 0.618 0.227 2.72 0.007
FDI − 0.600 0.405 − 1.48 0.139
MIN_R 0.260 0.359 0.73 0.467
NAT_R − 21.507 13.174 − 1.63 0.103
OIL_R − 2.028 8.009 − 0.25 0.800
C 0.170 1.643 0.10 0.917
Country 8: Thailand
ECT − 0.895 0.199 − 4.48 0.000
FOR_R − 5.534 6.183 − 0.89 0.371
FFEC 1.000 0.925 1.08 0.280
FDI − 0.561 0.407 − 1.38 0.168
MIN_R 103.741 49.987 2.08 0.038
NAT_R 0.599 5.758 0.10 0.917
OIL_R − 0.727 2.492 − 0.29 0.770
C − 3.457 2.531 − 1.37 0.172
Country 9: Vietnam
ECT − 0.121 0.084 − 1.43 0.153
FOR_R 0.943 0.585 1.61 0.107
FFEC 0.090 0.069 1.30 0.195
FDI 0.160 0.099 1.61 0.106
MIN_R − 3.132 1.036 − 3.02 0.003
NAT_R 1.889 1.730 1.09 0.275
OIL_R 0.285 0.097 2.92 0.003
C − 0.079 0.299 − 0.26 0.791
Country 10: Bangladesh
ECT − 0.485 0.217 − 2.23 0.026
FOR_R 5.153 2.706 1.90 0.057
FFEC − 0.021 0.176 − 0.12 0.905
FDI 0.412 0.535 0.77 0.442
MIN_R
NAT_R 0.531 0.680 0.78 0.435
OIL_R 0.441 4.019 0.11 0.913
C 0.391 1.056 0.37 0.711
Country 11: Bhutan
ECT − 0.485 0.137 − 3.54 0.000
FOR_R 0.702 0.660 1.06 0.288
FFEC
FDI 1.221 0.245 4.97 0.000
MIN_R − 27.074 10.780 − 2.51 0.012
NAT_R – – – –
OIL_R – – – –
C 4.522 1.330 3.40 0.001
Country 12: India
ECT − 0.608 0.262 − 2.32 0.020
FOR_R 2.065 7.325 0.28 0.778
FFEC 0.413 0.630 0.66 0.512
FDI − 1.543 0.628 − 2.45 0.014
MIN_R 1.090 1.255 0.87 0.385
NAT_R 4.183 12.024 0.35 0.728
OIL_R − 2.328 1.495 − 1.56 0.119
C 0.437 1.459 0.30 0.764
Country 13: Nepal
ECT − 1.014 0.225 − 4.50 0.000
FOR_R − 3.136 1.383 − 2.27 0.023
FFEC 0.379 0.235 1.61 0.106
FDI 0.537 1.445 0.37 0.710
MIN_R – – – –
NAT_R – – – –
OIL_R – – – –
C 3.677 1.044 3.52 0.000
Country 14: Pakistan
ECT − 0.942 0.210 − 4.47 0.000
FOR_R − 17.387 6.560 − 2.65 0.008
FFEC 0.613 0.287 2.13 0.033
FDI 1.393 0.597 2.33 0.020
(continued on next page)

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Y. Huang et al. Resources Policy 69 (2020) 101878

Table C (continued )
MIN_R 18.108 17.407 1.04 0.298
NAT_R 0.831 1.057 0.79 0.432
OIL_R − 2.126 1.233 − 1.72 0.085
C − 0.997 1.835 − 0.54 0.587
Country 15: Sri Lanka
ECT − 0.831 0.219 − 3.79 0.000
FOR_R 1.392 13.599 0.10 0.918
FFEC − 0.027 0.219 − 0.13 0.900
FDI 0.892 0.804 1.11 0.267
MIN_R − 18.888 95.497 − 0.20 0.843
NAT_R – – – –
OIL_R – – – –
C 1.541 1.393 1.11 0.269
Country 16: Kazakhstan
ECT − 0.819 0.162 − 5.04 0.000
FOR_R 65.107 63.469 1.03 0.305
FFEC 4.850 2.971 1.63 0.103
FDI − 0.254 0.148 − 1.72 0.086
MIN_R 2.180 0.699 3.12 0.002
NAT_R 2.440 1.251 1.95 0.051
OIL_R − 0.104 0.137 − 0.76 0.448
C − 7.358 3.294 − 2.23 0.026
Country 17: Kyrgyz Republic
ECT − 1.152 0.172 − 6.67 0.000
FOR_R 164.803 109.663 1.50 0.133
FFEC 0.161 0.243 0.66 0.508
FDI − 0.074 0.159 − 0.47 0.639
MIN_R 0.618 0.456 1.36 0.175
NAT_R 29.246 33.871 0.86 0.388
OIL_R − 3.188 3.305 − 0.96 0.335
C − 2.436 2.634 − 0.92 0.355
Country 18: Tajikistan
ECT − 0.330 0.110 − 2.99 0.003
FOR_R − 64.965 82.023 − 0.79 0.428
FFEC 0.128 0.157 0.82 0.415
FDI 0.196 0.207 0.95 0.344
MIN_R 0.218 1.767 0.12 0.901
NAT_R 8.803 14.223 0.62 0.536
OIL_R − 15.404 8.858 − 1.74 0.082
C 1.082 0.904 1.20 0.232
Country 19: Uzbekistan
ECT − 0.402 0.085 − 4.72 0.000
FOR_R − 668.923 300.834 − 2.22 0.026
FFEC 0.493 0.714 0.69 0.490
FDI 0.117 0.201 0.58 0.559
MIN_R − 0.033 0.194 − 0.17 0.861
NAT_R − 0.041 0.049 − 0.84 0.401
OIL_R − 0.216 0.176 − 1.22 0.221
C − 0.984 1.327 − 0.74 0.458
Country 20: Egypt, Arab Rep
ECT − 0.108 0.125 − 0.87 0.385
FOR_R − 0.104 3.376 − 0.03 0.975
FFEC − 0.038 0.314 − 0.12 0.904
FDI 0.646 0.168 3.84 0.000
MIN_R 2.206 1.482 1.49 0.137
NAT_R − 2.195 0.641 − 3.42 0.001
OIL_R 0.160 0.102 1.56 0.118
C − 0.631 0.801 − 0.79 0.430
Country 21: Iran, Islamic Rep
ECT − 1.130 0.250 − 4.52 0.000
FOR_R − 45.370 64.688 − 0.70 0.483
FFEC − 3.830 3.870 − 0.99 0.322
FDI 0.173 1.356 0.13 0.898
MIN_R 2.617 3.220 0.81 0.416
NAT_R − 7.525 1.914 − 3.93 0.000
OIL_R 0.090 0.161 0.56 0.577
C − 12.888 5.206 − 2.48 0.013
Country 22: Jordan
ECT − 0.510 0.167 − 3.05 0.002
FOR_R − 43.805 36.142 − 1.21 0.226
FFEC 0.854 0.512 1.67 0.096
FDI 0.016 0.079 0.20 0.839
MIN_R 0.370 0.197 1.87 0.061
NAT_R 31.242 27.325 1.14 0.253
OIL_R − 664.301 422.168 − 1.57 0.116
C − 2.268 1.759 − 1.29 0.197
Country 23: Lebanon
(continued on next page)

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Y. Huang et al. Resources Policy 69 (2020) 101878

Table C (continued )
ECT − 0.660 0.202 − 3.26 0.001
FOR_R 489.634 368.717 1.33 0.184
FFEC − 0.405 0.656 − 0.62 0.536
FDI − 0.034 0.260 − 0.13 0.894
MIN_R – – – –
NAT_R – – – –
OIL_R – – – –
C − 2.972 2.314 − 1.28 0.199
Country 24: Turkey
ECT − 0.695 0.217 − 3.19 0.001
FOR_R − 175.690 63.878 − 2.75 0.006
FFEC − 0.901 0.870 − 1.04 0.300
FDI 0.781 1.392 0.56 0.575
MIN_R 42.751 22.981 1.86 0.063
NAT_R − 484.601 361.829 − 1.34 0.180
OIL_R 87.699 40.643 2.16 0.031
C − 2.290 2.148 − 1.07 0.286
Country 25: Yemen, Rep
ECT − 0.860 0.242 − 3.54 0.000
FOR_R − 12.783 79.047 − 0.16 0.872
FFEC − 13.370 8.486 − 1.58 0.115
FDI − 0.162 0.417 − 0.39 0.696
MIN_R – – – –
NAT_R 0.340 1.751 0.19 0.846
OIL_R − 0.026 0.208 − 0.13 0.898
C − 11.945 4.989 − 2.39 0.017

Funding support

This work is supported by the ‘Korea Foundation for Advanced Studies’ International Scholar Exchange Fellowship for the academic year of
2017–18.

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