Financial development for sustainable resource efficiency: Fostering green growth in natural resource markets

We aim to analyze the outcomes of extracting natural resources on China's long-term economic growth, considering its dominant financial status regarding purchasing power parity (PPP). The prevalent discord between the favorable outcomes of resource mining on economic advancement and the adverse results on the ecosystem sparks this exploration. We utilize numerous distinct econometric panel methodologies, such as fixed effects, two-stage least squares, and robustness tests, utilizing provincial-level data from 2001 to 2022. Additionally, we examine how the significance of natural resources in the Chinese provincial economy can be diminished or enhanced by promoting education and environmentally friendly innovation. Our findings indicate that extracting natural resources harms long-term prosperity, lending empirical support to the "resource curse" theory. While resource extraction poses a challenge to sustainable development, it also presents an opportunity when accompanied by green innovation and education implementation. Furthermore, the consequences of resource mining for sustainable growth are more pronounced in less urbanized and Western regions, highlighting regional variability. The perceived adverse effects of natural resources need not be viewed as a curse if accompanied by green innovation and education. Building upon these results, we propose policy implications and suggestions to foster sustainable economic growth in China.