Skip to main content

Research Repository

Advanced Search

Does natural resource curse in finance exist in Africa? Evidence from spatial techniques

Nurmakhanova, Mira; Elheddad, Mohamed; J.K. Alfar, Abdelrahman; Egbulonu, Alloysius; Zoynul Abedin, Mohammad

Does natural resource curse in finance exist in Africa? Evidence from spatial techniques Thumbnail


Authors

Mira Nurmakhanova

Mohamed Elheddad

Alloysius Egbulonu

Mohammad Zoynul Abedin



Abstract

This paper aims to examine the relationship between financial development and natural resources. By using panel data of 20 selected African countries from 1995 to 2020, we investigate whether all types of financial development have the same relationship with natural resources. In doing so, a recently developed novel estimation technique, spatial econometric, is employed for the first time to estimate the FD-NR relationship and account for the possible spillover effect of financial development in one country on the neighbouring countries. The novelty of this methodology is to consider structural breaks and the heterogeneity issues that are common in panel data. The main findings of this paper are that there is a robust negative effect of natural resource rents on both stock market capitalization ratio and available private credit. Furthermore, the empirical evidence suggests new insights for policymakers to use appropriate and sophisticated policies to boost the development of the financial sector in African countries over the long term. More policy implications are further discussed in this study.

Journal Article Type Article
Acceptance Date Nov 18, 2022
Publication Date 2023-01
Deposit Date Feb 17, 2025
Publicly Available Date Feb 18, 2025
Journal Resources Policy
Print ISSN 0301-4207
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 80
DOI https://doi.org/10.1016/j.resourpol.2022.103151

Files





You might also like



Downloadable Citations