Natural Resources and Economic Growth Nexus in BIMSTEC Nations

Abstract

The study inspects the dynamic linkage between natural resources and economic growth in BIMSTEC nations from 1991 to 2023. The study utilised the first- and second-generation unit root test to test the presence of a unit root in the series and the residual-based Panel Co-integration technique to test the dynamics of natural resources in BIMSTEC countries. The results are validated by the Panel-PMG co-integration technique. The results indicate that natural resources are co-integrated with economic growth in the long run and natural resources have a positive influence on growth. Further, gross capital formation and gross expenditure reveal a positive relationship with economic growth. The findings of this study are useful for policymakers associated with BIMSTEC nations. The results emphasize the need for policymakers to encourage the effective and productive consumption of natural resources as well as the expansion and production of renewable energy sources such as solar, wind, hydropower, and geothermal power.