Impact of natural resources, financial innovation, and policy robustness on economic growth: A study of China and India

The rapid economic growth of China and India has been accompanied by increasing energy consumption and greenhouse gas emissions, raising concerns about the sustainability of their development. To address these challenges, it is crucial to understand the complex interplay between natural resources, financial innovation, policy robustness, and carbon emissions in driving economic growth. This study aims to analyze the influence of these factors on GDP growth in China and India over a 20-year period from 2002 to 2022. Employing diagnostic tests to ensure model reliability, the research methodology involves a comprehensive analysis of long-term relationships between the variables. The main findings reveal that natural resources, financial innovation, and policy robustness have significant positive impacts on GDP growth, highlighting the importance of sustainable resource use, innovative financial mechanisms, and robust environmental policies. However, the study also uncovers a significant positive impact of greenhouse gas emissions on GDP growth, indicating that economic growth can lead to increased emissions in the absence of sustainable practices. These results have broader implications for policymakers and stakeholders in developing economies, emphasizing the need to strike a balance between economic development and environmental sustainability. The study contributes to the ongoing discourse on the role of natural resources, financial innovation, and policy frameworks in achieving sustainable and resilient economic growth, ultimately promoting a greener and more prosperous future. © 2024 Elsevier Ltd