Journal
SUSTAINABILITY
Volume 13, Issue 5, Pages -Publisher
MDPI
DOI: 10.3390/su13052847
Keywords
sustainable financing; natural resources curse; Bayer and Hanck combined cointegration; tests; Granger causality; West Africa
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The study investigates the importance of sustainable finance for the natural resource curse in Nigeria and Ghana, confirming the existence of a financial resource curse in these countries. The findings highlight the critical role of sustainable financing in natural resource management, with the human development index identified as a key mediator in how sustainable finance impacts the natural resource curse. This study suggests the need for a vibrant and sustainable financing strategy to support domestic private investors in natural resource exploration and development, while also emphasizing the importance of a strong financial market for promoting effective natural resource management policies.
The financial sector plays a critical role in society by mediating resources and assets within the economy between surplus and deficit units. Therefore, they have a great responsibility for the sustainability and prosperity of natural endowments. This study aimed to determine whether sustainable finance matters for the natural resource curse in Nigeria and Ghana. The empirical evidence is based on the Bayer and Hanck combined cointegration tests and Vector Autoregressive/Vector Error Correction Granger causality tests. The study highlights the importance of sustainable financing in natural resources management. Our findings also confirmed the existence of the financial resource curse in Nigeria and Ghana. Likewise, the medium through which sustainable finance affects the natural resource curse has been identified as the human development index (economic welfare). This current study has critical policy implications that suggest the need to establish a vibrant, sustainable financing strategy to assist domestic private investors with a strong interest in natural resource exploration and development, taking into account macroeconomic sustainability. Additionally, it also important to build a strong financial market which allows for policies designed to promote natural resource management.
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