Resources abundant economies and sustainability of economic growth: A novel panel evidence of high resources economies

In the contemporary era, where some countries are in the transition stage for attaining a sustainable environmental and economy, several economies worldwide are still resources dependent due to abundant natural resources. This study examines the influence of natural resources' components on the financial system's sustainability in resources abundant economies during 1989-2021. Second-generation panel techniques are utilized for empirical examination, revealing the long-run cointegration between the study variables. Following the non-normality characteristic of the data, this study uses the novel non-parametric approach and found that natural resources' components heterogeneously affect financial expansion in the region. Specifically, mineral rents are playing a progressive role in developing the financial system. However, forest, oil, and natural gas rents significantly harm financial development. The empirical results depicted that economic growth significantly contributes to the countries' financial development. This study suggested revisiting policies regarding the sustainable extraction of natural resources and using higher economic growth for sustainable financial development.