Search Results (29)

This study examines the impact of environmental, social, and governance (ESG) performance on economic growth in Saudi Arabia from 1990 to 2022. It uses a tailored ESG index and applies ordinary least squares (OLS) and autoregressive distributed lag (ARDL) models. The analysis reveals that while individual ESG components do not show significant short-term effects, the composite ESG index has a statistically significant positive effect on long-term GDP growth. These findings highlight the importance of integrated ESG strategies in enhancing economic resilience and diversification in resource-based economies. Moreover, although oil rents and trade openness continue to support short-term growth, they are associated with governance and environmental trade-offs, reflecting transitional challenges on the path to sustainability. Thie study provides new empirical evidence on the macroeconomic relevance of ESG in emerging economies and introduces a context-specific ESG index aligned with national policy goals. The results underscore the need to embed of embedding ESG frameworks into national development plans to ensure long-term economic resilience and structural transformation in line with Vision 2030. Full article

Starting with the debate on the “resource curse”, the main aim of this paper is to evaluate the impact of natural resource rents on income/wealth inequality in the European Union (EU) during the period from 1990 to 2023. Excepting the Gini index, natural resources rents reduced other measures of income and wealth inequality, and the results indicate that growth has a masking mediating effect on the Gini index, but no mediation role of GDP was observed in the case of the top 1% income/wealth share. The income inequality based on the top 1% share significantly increased in Denmark after the discovery of oil and gas relative to the control group composed of Finland and Sweden. Other control variables are considered, and some policy recommendations are proposed to reduce income/wealth inequality. Full article

This study analyzes the influence of natural resource rents, governance indicators, and their interactions on economic growth in twelve oil-producing countries in the MENA region from 2002 to 2021. Various versions of a panel ARDL model are estimated using PMG, MG, and DFE estimators. The results suggest that natural resource rents in MENA oil-producing countries positively affect long-term economic growth when accompanied by good governance. Government effectiveness and control of corruption also contribute positively to economic growth in the long run. Furthermore, financial development is found to enhance long-term economic growth. These findings highlight the potential of natural resources to drive economic growth when supported by strong institutions. To maximize natural resource rent benefits, MENA countries should improve governance indicators such as government effectiveness, control of corruption, and rule of law. This includes enhancing civil service competence, decision implementation, and managing political pressure. Key factors include revenue mobilization, infrastructure quality, policy consistency, and penalties for corruption. Ensuring equality under the law, transparent legal processes, an independent judiciary, and access to legal remedies are crucial for effective rule of law. Additionally, MENA countries should prioritize developing non-oil sectors like tourism, industry, technology, entertainment, transportation, and communication. Full article

Renewable energy development is paramount in supporting the transition to a cleaner environment through green transition policies. Thus, policies and measures that support renewable energy development are fundamental. To this end, studies that examine how renewable energy development is achieved have been performed, but the role of research and development, which is crucial in fostering technological innovations and the role of investment in energy in achieving renewable energy development, is lacking. Therefore, this research was employed to investigate the role of research and development and investment in energy in the BRICS economies. The data of the BRICS economies were used for the period from 2000 to 2021. This study used the ‘Methods of Moments Quantile Regression’ to ensure robust findings are presented, hence informing policies that are crucial in achieving environmental sustainability through using renewable energy in the BRICS economies. Major findings showed that investment in energy, research and development, economic growth, and the overall inflation rate raised RE use in the BRICS countries. Oil rent, financial development, and institutional quality reduced RE development. This research suggests the adoption of vigorous policies that ensure financial resources are channeled toward financing the development of RE in the BRICS economies. Through supporting investment in energy and research and development, the BRICS economies can achieve the goal of sustainable carbon neutrality. Full article

The Gulf Cooperation Countries are rich in natural resources such as oil, yet they have serious environmental problems. These countries are also located in regions where there is abundance of sunshine, yet are not capitalizing on the use of solar energy—a clean source of fuel. They heavily rely on fossil fuels that are cheap and readily available in the region, causing serious environmental problems. This research investigates the role of trade, technology, and economic growth in improving environmental sustainability in this region; hence, covering the gap existing in the literature on how this region can address the problem of environmental sustainability. This research uses annual data of the Gulf Cooperation Countries for the period 1990 to 2022 and analyses it with the Methods of Moments Quantile Regression. The major findings presented in the research show the importance of technological innovations in ensuring the eradication of environmental deterioration. Technological innovation is observed to reduce environmental problems by 1.94 to 3.11 magnitude. The results also show that trade openness and natural resources rents fundamentally lower environmental deterioration in the long term by 0.02, and 0.05 to 0.09 magnitudes, respectively. However, the results show that economic growth, globalization, and financial development are harmful to environmental sustainability in this region. These factors tend to raise environmental damage by 0.14 to 0.24, 0.34 to 0.43, and 9.2 to 5.74 units on average, respectively. This research gives key policies towards advancing environmental sustainability through trade openness, natural resources rents, and technological innovation in the Gulf Cooperation Countries. Full article

This research explores the effects of significant global economic shocks, such as the 2008 Global Financial Crisis and the 2020 COVID-19 pandemic, on GDP growth in the Gulf Cooperation Council (GCC) nations. Employing a dynamic generalized method of moments (GMM) model, the analysis highlights the strong momentum effect of lagged GDP growth, where past performance plays a critical role in shaping current economic outcomes. The findings also reveal that natural resources continue to positively influence short-term growth, but with diminishing returns over time, supporting the resource curse hypothesis and underscoring the need for broader structural reforms to ensure long-term sustainability. In addition, the results show that external investments flowing into the country, trade balance, and inflation emerge as key drivers of economic growth. While moderate inflation is positively associated with economic expansion, unemployment exerts a significant negative effect on GDP growth, particularly in models that account for country-specific characteristics. This emphasizes the need for labor market reforms to improve employment rates and support sustainable development. The role of gross capital formation, particularly in both the dynamic GMM and random effects models, further underscores the importance of strategic domestic investment, especially during periods of global disruption. These findings emphasize the critical need for economic diversification in the GCC. Policymakers should focus on attracting foreign investment, managing inflation, enhancing human capital, and boosting domestic investment to mitigate the adverse effects of the resource curse and secure sustainability. While market capitalization and oil rents may stimulate short-term growth, their long-term sustainability remains uncertain without greater diversification. Both external and domestic investments emerge as critical drivers of long-term growth, while persistent challenges such as inflation and unemployment continue to pose risks to economic stability. The study highlights the need to reduce reliance on oil and leverage human capital to build more resilient economies capable of adapting to future challenges. By offering dynamic, empirical insights into the balance between resource reliance and sustainable growth, this research adds valuable insights to the policy discussion on economic diversification in the GCC. Policymakers are urged to prioritize FDI, inflation management, domestic capital formation, and human capital development to mitigate vulnerabilities and ensure sustainable economic growth in the face of ongoing global uncertainties. Full article

This study investigates the relationship between sustainable economic growth and foreign direct investment (FDI) in Saudi Arabia from 1980 to 2023. The ARDL approach and VECM technique are employed to analyze the short-run and long-run dynamics. The short-run results show mixed effects. Sustainable economic growth has a positive impact on current and one-period lagged FDI but a negative impact on the two periods lagged. Trade openness and infrastructure negatively affect FDI in the short run. Interestingly, oil rents and real economic growth also have negative short-run impacts on FDI, but these effects become positive with a longer lag. Long-run analysis reveals a negative relationship between trade openness, infrastructure, and oil rents with FDI, suggesting a potential crowding-out effect. Trade openness has a positive long-run impact on most variables, including sustainable growth, FDI, real growth, and CO₂ emissions. Oil rents also have a positive long-run impact on these variables. This study finds six bidirectional causal relationships in the short run, primarily between trade openness, infrastructure, oil rents, and FDI. Unidirectional causality runs from oil rents, trade openness, exchange rate, sustainable growth, and real growth to FDI and infrastructure. Additionally, CO₂ emissions cause FDI, and trade openness causes sustainable growth. While sustainable economic growth benefits FDI in the long run, short-term policies regarding trade openness and infrastructure require reevaluation. Oil revenue and real economic growth may initially deter FDI, but this reverses in the long term. To attract sustainable FDI, policymakers should focus on long-term economic growth strategies and consider reforms in trade and infrastructure policies. A comprehensive FDI strategy that moves beyond oil dependence and leverages trade openness is crucial to long-term economic diversification. Full article

This paper delves into the critical determinants of renewable energy consumption, focusing on the contrasting roles of oil imports and exports. It aims to bridge the knowledge gap by comparing these determinants across both oil-importing and oil-exporting nations, offering a comprehensive and nuanced perspective to inform policy recommendations. Using annual data from 1990 to 2018 sourced from the World Bank database, the study employs panel multiple regression analysis and adopts a fixed effects model to explore two main questions: What drives the use of renewable energy sources? How does a country’s oil importer or exporter status affect these factors? The findings reveal a significant but inverse relationship between oil rents and renewable energy consumption (REC) for both types of countries. Additionally, there is a notable negative correlation between GDP growth and REC for both oil-exporting and oil-importing countries. Interestingly, the crude oil average closing price and inflation show an insignificant impact on REC in both contexts. The study also highlights that net energy imports significantly affect REC, with a much stronger inverse relationship in oil-importing countries compared with oil-exporting ones. For oil-importing countries, diversifying energy sources is a crucial investment. Governments should prioritize research and development in renewable energy to spur technological advancements, enhancing efficiency and affordability. Economic growth-promoting policies, such as tax incentives and subsidies for renewable energy businesses, are vital for encouraging sustainable practices. Consistent, long-term policies are essential for providing investor confidence and supporting the transition to renewable energy. For oil-exporting countries, similar strategies are recommended. Additionally, allocating a portion of oil revenues to renewable energy infrastructure and funding research and development in renewable technologies through local universities and startups are crucial steps. This dual approach will not only enhance energy diversification but also foster innovation and sustainability in the energy sector. Full article

The Middle East and North African (MENA) region is among the regions most impacted by global warming and climate change. At the same time, the region accounts for 58% of global oil reserves and 43% of global natural gas reserves. It is, therefore, important to assess the role of natural resource abundance in the environmental degradation faced by MENA resource-abundant countries. This study contributes to this research area by exploring the short- and long-term repercussions of natural resources on the ecological footprint (EFP) of eight resource-rich MENA countries between 2000 and 2021. The research performs both aggregate and disaggregate assessments by considering the total resource rents, as well as specific rents of oil, natural gas, and minerals. The pooled mean group estimator indicates that a rise of 1% in total natural resources induces an increase of 0.053% in the EFP, implying that natural resources are harmful to the environment. The disaggregate analysis shows that oil rents have the most adverse environmental effects in the long run, followed by natural gas. Finally, mineral rents are determined to be neutral vis-à-vis the environment. In light of these findings, policy recommendations for reducing the adverse environmental impacts of natural resources are suggested. Full article

This study aimed to investigate the impact of Pulsed Electric Fields (PEF) technology in the extraction of olive oil on a pilot scale, using the “Galega Vulgar” olive variety as raw material. The extraction assisted by PEF had a malaxation time of 30 min and was compared with the traditional process of 45 min of malaxation. The main quality parameters of olive oil and the PEF’s cost-benefit assessment were performed. The incorporation of PEF in olive oil production reduced the malaxation stage by 33% without compromising the yield or extra-virgin classification. This efficiency leads to a potential 12.3% increase in annual olive oil production, with a 12.3% and 36.8% rise in revenue and gross profit, respectively. For small-scale production, the considerable upfront investment required for PEF equipment may be a challenge in terms of return on investment. In this scenario, opting for a renting scheme is the best economic solution, especially given the seasonal nature of olive oil production. In medium- to large-scale production, the investment in PEF is a sound investment since it is possible to achieve, with an equipment cost of EUR 450,000 and a production output of 5 tons per hour, an annual ROI of 20%. Full article

Natural resource rent (NRR) can be a blessing for the economic growth of resource-rich economies but may cause environmental problems. The present research explores the effects of NRR, economic growth, trade openness (TO), and foreign direct investment (FDI) on the carbon intensities of different sources of carbon emissions in Saudi Arabia from 1968 to 2021. The environmental Kuznets curve (EKC) is substantiated in the relationship between economic growth and the carbon intensities of gas emissions and cement emissions in the long run. The EKC is also validated in models of the carbon intensities of oil emissions, gas flaring emissions, and aggregated CO₂ emissions in the short run. TO reduces the carbon intensities of oil emissions, gas emissions, and cement emissions in the long run. FDI mitigates the carbon intensity of gas flaring emissions but increases the carbon intensity of cement emissions. NRR increases the carbon intensities of all investigated sources of emissions in a linear analysis. In a nonlinear analysis, increasing NRR increases and decreasing NRR reduces the carbon intensities of all sources of emissions except aggregated CO₂ emissions. In the short-run results, TO decreases the carbon intensity of gas flaring emissions and increases the carbon intensities of gas emissions and cement emissions. FDI decreases the carbon intensities of all sources of emissions. In a linear analysis, NRR reduces the carbon intensities of oil emissions and cement emissions and increases the carbon intensities of gas emissions and gas flaring emissions. In a nonlinear analysis, increasing NRR reduces the carbon intensity of cement emissions and increases the carbon intensities of gas emissions and gas flaring emissions. Moreover, decreasing NRR reduces the carbon intensities of gas emissions, gas flaring emissions, and aggregated CO₂ emissions and increases the carbon intensities of oil emissions and cement emissions. The effect of NRR is asymmetrical in models of the carbon intensities of aggregated CO₂ emissions, oil emissions, and gas flaring emissions and symmetrical in models of the carbon intensities of gas emissions and cement emissions. Full article

This study aims to examine the relationship between green investment (GI), fiscal policy (FP), environmental tax (ET), energy price (EP), natural resource rent (NRR), and the consumption of clean energy (CE) to promote sustainable development in Cambodia for the period 1990–2021. The study implemented linear and nonlinear frameworks to document explanatory variables’ potential effects on clean energy consumption in the long and short run. The research findings demonstrate a robust and favorable connection between GI, FP, ET and CE, both in the long term and short term. An augmentation in GI results in the establishment of sustainable growth in the utilization of renewable energy, thereby underscoring the significance of green initiatives in advancing clean energy technologies. Fiscal policies, encompassing tax incentives and subsidies, exert a substantial and enduring influence on expanding renewable energy sources. Implementing environmental taxes catalyzes the demand for clean energy, significantly preserving the environment and promoting sustainable energy practices. Furthermore, the study illuminates the inverse correlation between oil prices and REC. Adopting renewable energy sources may face obstacles in the form of elevated oil prices, as conventional energy sources maintain a cost advantage. On the contrary, decreased oil prices and natural resource rent incentivize transitioning towards using clean energy. Countries that heavily depend on the export of natural resources may display a reduced inclination to invest in renewable energy, commonly called the “resource curse” phenomenon. This study provides valuable insights into the intricate interplay of multiple factors that influence renewable energy consumption and contribute to sustainable development. Policymakers, businesses, and researchers can employ these findings to develop productive strategies that advance the inclusion of clean energy, tackle potential challenges, and cultivate a more environmentally friendly and sustainable future. Full article

Saudi Arabia has launched its vision for the next decade, which is branded Vision 2030. Sustainable economic development is the core of the Saudi Vision 2030, which has seventeen sustainability programs covering a wide range of Saudi economic sectors. The aim of this study was to examine the impact of the sustainable economic development focus on the real exchange rate in Saudi Arabia. The ARDL cointegration method was used to assess the existence of the long-run relationships among the variables. The Sustainable Development Index (SDI) was used as a measure of sustainable economic development. Sustainable economic development was found to have a negative impact on the real exchange rate in terms of both the long- and short-run dynamics. Moreover, the GDP was found to have a positive impact on the real exchange rate in the long run and to have the highest coefficient of the model. However, the money supply was found to have no impact on the real exchange rate, while oil rent was found to have a negative impact on the real exchange rate in terms of both the long-run and the first-moment short-run dynamics. Government expenditure was found to be insignificant in the long run and to have a positive significant impact on the real exchange rate in the short-run dynamics. Furthermore, the sustainability impact on the real exchange rate in Saudi Arabia has not been discussed due to the economic structure that relies on oil and the change toward a sustainable economy that occurred in the recent decade. The results provide insight into the potential future challenges faced by the Saudi economy as sustainability programs progress in Saudi Arabia. Full article

Economic diversification has been a cornerstone of the policy agenda of resource-rich countries, such as Gulf Cooperation Council (GCC) countries, seeking sustainable economic development to avoid reliance on hydrocarbon revenues that cause significant vulnerabilities and economic, social, and political instability in the long term. GCC governments invest the proceeds from rich hydrocarbon exports to build a diverse local economy. However, it is unclear whether increased capital formation through public investments helps these economies diversify away from hydrocarbons. The main objective of this study was to determine whether GCC countries’ capital formation has appreciable impulse effects on response–economic diversification in the short or long term. A panel vector autoregression method describing the cause and effect or the dynamic relation between capital formation and economic diversification was used to attest to the success of economic diversification policies in resource-rich countries. The results show that a shock to real gross capital formation has a limited impact on economic diversification (the non-resource rent share) in the GCC economies. This could be attributed to these countries’ oil/gas-focused fixed investment build-up. Furthermore, an evaluation of the recursive relationship shows that the impact of growing non-hydrocarbon sectors on gross capital formation is limited. Full article

In the modern era of globalization, natural resources have become an important factor in shaping a sustainable future; however, the evidence on the role of globalization in reducing the adverse environmental impacts of natural resources is relatively scarce. The current study explores the dynamic interaction between energy consumption, economic development proxied through the human development index, population, natural resources, globalization, and ecological footprint under the core idea of the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT). This research applies panel data for the period from 1999 to 2018 in nine countries with the highest oil production (Brazil, Canada, China, Iran, Kuwait, Russia, Saudi Arabia, United Arab Emirates, and the United States). The results of this study are based on the panel Method of Moments Quantile Regression (MMQR). Empirical findings foundthat economic development, energy consumption, population, and natural resources contribute to increased environmental degradation, while globalization seems the main source of environmental sustainability. Concerning the indirect impacts of globalization, expanded interaction and integration among oil-producing countries helped to inhibit ecological footprint; nevertheless, natural resources complicate the design of a sustainable future by promoting environmental degradation. Additionally, a bidirectional causality relation was discovered between population, energy consumption, globalization, and ecological footprint; however, the panel Dumitrescu and Hurlin causality test results revealed a unidirectional causality association from economic development to ecological footprint and from natural resources to ecological footprint. Our findings shed new light on the criticality of globalization in achieving environmental sustainability by providing cleaner practices that will prevent rent-seeking. Full article