Financial development and resource curse: panel threshold evidence
This paper examines the relationship between natural resources and financial development using non-dynamic panel threshold analysis. This paper contributes to the natural resource curse (NRC) literature in three main areas. First, we focus on the relationship between resource abundance and financial...
| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia
2012
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| Online Access: | http://psasir.upm.edu.my/id/eprint/48852/ http://psasir.upm.edu.my/id/eprint/48852/1/Financial%20development%20and%20resource%20curse%20panel%20threshold%20evidence.pdf |
| _version_ | 1848851201966211072 |
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| author | Sarmidi, Tamat Law, Siong Hook Mohd Salleh, Norlida Hanim |
| author_facet | Sarmidi, Tamat Law, Siong Hook Mohd Salleh, Norlida Hanim |
| author_sort | Sarmidi, Tamat |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper examines the relationship between natural resources and financial development using non-dynamic panel threshold analysis. This paper contributes to the natural resource curse (NRC) literature in three main areas. First, we focus on the relationship between resource abundance and financial development which is rarely discussed in the NRC literature. Second, we suppose that the relationship between resource abundance and financial development may not necessarily monotonic. It is because many relationships between economic variables are not linear throughout time or space due to natural cycle of economics forces. Therefore it might be the case that at one level of natural resources, the effect to financial development is negative while at another level the effect might be positive. Third, development of social capital seems to be an important mechanism for nullifying the NRC paradox. Employing an endogenous non-dynamic panel threshold estimation technique, we find four important results; first, the relationship between natural resource and financial development is non-monotonic; second, human development contributes positively to the financial development; third, the existence of NRC hypothesis in the finance-resource nexus is depending on the level of human development. Low human development economies experience negative contribution of natural resources to financial development, while this relationship is not applicable for high human development economies. |
| first_indexed | 2025-11-15T10:18:26Z |
| format | Conference or Workshop Item |
| id | upm-48852 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T10:18:26Z |
| publishDate | 2012 |
| publisher | School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-488522016-11-01T04:50:24Z http://psasir.upm.edu.my/id/eprint/48852/ Financial development and resource curse: panel threshold evidence Sarmidi, Tamat Law, Siong Hook Mohd Salleh, Norlida Hanim This paper examines the relationship between natural resources and financial development using non-dynamic panel threshold analysis. This paper contributes to the natural resource curse (NRC) literature in three main areas. First, we focus on the relationship between resource abundance and financial development which is rarely discussed in the NRC literature. Second, we suppose that the relationship between resource abundance and financial development may not necessarily monotonic. It is because many relationships between economic variables are not linear throughout time or space due to natural cycle of economics forces. Therefore it might be the case that at one level of natural resources, the effect to financial development is negative while at another level the effect might be positive. Third, development of social capital seems to be an important mechanism for nullifying the NRC paradox. Employing an endogenous non-dynamic panel threshold estimation technique, we find four important results; first, the relationship between natural resource and financial development is non-monotonic; second, human development contributes positively to the financial development; third, the existence of NRC hypothesis in the finance-resource nexus is depending on the level of human development. Low human development economies experience negative contribution of natural resources to financial development, while this relationship is not applicable for high human development economies. School of Economics, Faculty of Economics and Management, Universiti Kebangsaan Malaysia 2012 Conference or Workshop Item PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/48852/1/Financial%20development%20and%20resource%20curse%20panel%20threshold%20evidence.pdf Sarmidi, Tamat and Law, Siong Hook and Mohd Salleh, Norlida Hanim (2012) Financial development and resource curse: panel threshold evidence. In: Seventh Malaysian National Economic Conference (PERKEM VII), 4-6 June 2012, Hotel Kinta Riverfront, Ipoh, Perak, Malaysia. (pp. 1405-1413). http://www.ukm.my/fep/perkem/contents/perkem2012-2-11.html |
| spellingShingle | Sarmidi, Tamat Law, Siong Hook Mohd Salleh, Norlida Hanim Financial development and resource curse: panel threshold evidence |
| title | Financial development and resource curse: panel threshold evidence |
| title_full | Financial development and resource curse: panel threshold evidence |
| title_fullStr | Financial development and resource curse: panel threshold evidence |
| title_full_unstemmed | Financial development and resource curse: panel threshold evidence |
| title_short | Financial development and resource curse: panel threshold evidence |
| title_sort | financial development and resource curse: panel threshold evidence |
| url | http://psasir.upm.edu.my/id/eprint/48852/ http://psasir.upm.edu.my/id/eprint/48852/ http://psasir.upm.edu.my/id/eprint/48852/1/Financial%20development%20and%20resource%20curse%20panel%20threshold%20evidence.pdf |