Role of Natural Resources Rent on Economic Growth : Fresh Empirical Insight from Selected Developing Economies

The connection between natural resource rents and economic development has recently been the subject of a heated dispute. Many nations with abundant natural resources have shown dismal economic progress. The main difficulties still lie in making resource rents an engine for growth rather than its inhibitor by concentrating on the causal relationships between total natural resource rents and economic development in a sample of the top resource-rich nations between 1990 and 2020. The empirical findings support the nonlinear cointegration of the variables in Selected developing economies. The "resource curse" phenomenon in these nations is supported by long-run asymmetric effect data showing that total natural resource rent negatively impacts economic development in Nepal, Sri Lanka, and the Afghanistan. However, we discovered that natural resource rent had a favorable impact on economic growth in Pakistan and India, suggesting that natural resources benefit these nations' economies. Vietnam and Sri Lanka show a long-run asymmetric impact between total natural resource rent and economic development, whereas Bhutan and the Maldives show a short-run asymmetric effect. The findings also show that economic growth in most nations is positively impacted by a positive shock to trade openness. According to the nonlinear framework's causality analysis, most countries evaluated don't experience economic development due to natural resource rent. To maximize the advantages of trade openness, particularly in the nations where the "natural resource curse phenomena observed," we advise adopting further trade liberalization measures. The empirical findings have practical policy implications