Can the Resource Curse for Well-Being Be Morphed into a Blessing? Investigating the Moderating Role of Environmental Quality, Governance, and Human Capital
Abstract
:1. Introduction
2. The UAE Economy: Stylized Facts
3. Reviewing the Existing Literature
3.1. Resource Endowments and Human Well-Being Nexus
3.2. Human Capital, Governance, Emissions, and Resource Endowments
4. Data and Methods
4.1. Research Design and Data
4.2. Methods
4.2.1. Examining Variable Cointegration: ARDL Technique
4.2.2. Investigating Variable Causality: VECM Approach
5. Empirical Findings and Discussion
5.1. Checking the Stationarity of Variables
5.2. Findings of ARDL Cointegration Analysis
5.3. Long- and Short-Term Estimates
5.4. Variables Causal Link Investigation
6. Conclusions and Policy Recommendations
Author Contributions
Funding
Conflicts of Interest
Abbreviations and Acronyms
NR | Natural resource |
HW | Human well-being |
HDI | Human Development Index |
Human capital | HC |
Institutional quality | IQ |
Human development | HD |
Natural resource rent | NRR |
Appendix A
Variable | Source |
Natural resource rent | WDI |
Human Development Index | UNDP |
Governance | WGI |
CO2 emissions | Global Carbon Atlas |
Human capital | PWT |
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HDI | CO2 | LnNRR | HC | GOV | |
---|---|---|---|---|---|
Mean | 0.81 | 175.91 | 11.07 | 2.65 | 0.56 |
Median | 0.81 | 160.21 | 11.11 | 2.71 | 0.57 |
Maximum | 0.89 | 286.34 | 11.61 | 2.75 | 0.69 |
Minimum | 0.72 | 76.83 | 10.52 | 2.33 | 0.39 |
Std. Dev. | 0.05 | 70.35 | 0.36 | 0.12 | 0.10 |
Skewness | 0.18 | 0.24 | 0.02 | −1.57 | −0.15 |
Kurtosis | 2.28 | 1.57 | 1.51 | 4.34 | 1.36 |
Jarque–Bera | 0.81 | 2.87 | 2.79 | 12.19 | 3.48 |
Probability | 0.67 | 0.24 | 0.25 | 0.00 | 0.18 |
Sum | 24.15 | 5277.22 | 332.15 | 66.35 | 16.75 |
Sum Sq. Dev. | 0.06 | 143,533.40 | 3.80 | 0.32 | 0.28 |
HDI | 1 | ||||
CO2 | 0.96 | 1 | |||
LNNRR | 0.76 | 0.83 | 1 | ||
HC | 0.79 | 0.81 | 0.81 | 1 | |
GOV | 0.61 | 0.69 | 0.64 | 0.32 | 1 |
Variable | ADF Test with Intercept and Trend | PP Test with Intercept and Trend | ||||||
---|---|---|---|---|---|---|---|---|
At Level | At First Difference | At Level | At First Difference | |||||
t-Statistic | p-Value | t-Statistic | p-Value | t-Statistic | p-Value | t-Statistic | p-Value | |
HDI | −2.50 | 0.3253 | −4.04 ** | 0.0190 | −1.76 | 0.6994 | −4.05 ** | 0.0187 |
CO2 | −2.03 | 0.5618 | −5.62 *** | 0.0005 | −1.93 | 0.6121 | −5.65 *** | 0.0004 |
LnNRR | −2.27 | 0.4379 | −4.56 *** | 0.0060 | −2.39 | 0.3765 | −4.90 *** | 0.0026 |
HC | −1.53 | 0.7838 | −7.72 *** | 0.0000 | −1.19 | 0.8886 | −7.46 *** | 0.0000 |
GOV | −4.45 ** | 0.0136 | −6.69 *** | 0.0003 | −4.33 * | 0.0167 | −6.28 *** | 0.0007 |
Bounds Testing Approach to Cointegration | Diagnostic Tests | |||||||
---|---|---|---|---|---|---|---|---|
Estimated Models | Lag Length | F-Statistic | CUSUM | CUSUMsq | ||||
HDIt = f(CO2t, lnNRRt, HCt, GOVt) | 1, 2, 2, 2, 2 | 5.163 ** | 0.6621 (0.7182) | 0.1168 (0.7361) | 0.9429 (0.3734) | 2.7906 (0.1285) | Stable | Stable |
CO2t = f(HDIt, lnNRRt, HCt, GOVt) | 2, 2, 2, 2, 2 | 1.945 | 0.9793 (0.6128) | 2.6539 (0.1189) | 0.4039 (0.6983) | 1.6753 (0.2642) | Stable | Stable |
lnNRRt = f(HDIt, CO2t, HCt, GOVt) | 2, 2, 2, 2, 2 | 2.486 | 0.9583 (0.5155) | 0.0331 (0.8574) | 1.1568 (0.2853) | 5.6985 (0.0914) | Stable | Stable |
HCt = f(HDIt, CO2t, lnNRRt, GOVt) | 2, 2, 2, 2, 2 | 2.397 | 0.5864 (0.7459) | 0.8632 (0.3639) | 1.2742 (0.2433) | 2.6026 (0.1535) | Stable | Stable |
GOVt = f(HDIt, CO2t, lnNRRt, HCt) | 2, 2, 2, 2, 2 | 4.799 ** | 0.6534 (0.7213) | 1.6638 (0.2118) | 4.6791 (0.0649) | 2.9166 (0.1304) | Stable | Stable |
Significance Level | Critical values (T = 30) | |||||||
Lower bounds I(0) | Upper bounds I(1) | |||||||
1% level | 2.752 | 3.994 | ||||||
5% level | 3.354 | 4.774 | ||||||
10% level | 4.768 | 6.670 |
Dependent Variable HDI | ||||
---|---|---|---|---|
Long-Run Analysis | ||||
Variable | Coefficient | Std. Error | t-Statistic | Prob. |
CO2 | 0.00 | 0.00 | 7.31 | 0.0000 |
LnNRR | −0.06 | 0.02 | −2.92 | 0.0172 |
HC | −0.12 | 0.12 | −1.01 | 0.3403 |
GOV | −0.05 | 0.06 | −0.74 | 0.4758 |
Short-Run Analysis | ||||
Variable | Coefficient | Std. Error | t-Statistic | Prob. |
C | 0.00 | 0.00 | 0.09 | 0.9327 |
D(HDI(-1)) | 1.01 | 0.39 | 2.60 | 0.0194 |
D(LnNRR(-1)) | 0.01 | 0.01 | 0.85 | 0.4101 |
D(CO2(-1)) | 0.00 | 0.00 | 0.25 | 0.8086 |
D(HC(-1)) | −0.05 | 0.04 | −1.10 | 0.2861 |
D(GOV(-1)) | −0.02 | 0.01 | −1.17 | 0.2580 |
ECM(-1) | −1.74 | 0.43 | −4.06 | 0.0009 |
R-squared | 0.66 | |||
Adjusted R-squared | 0.53 | |||
F-statistic | 5.17 * | |||
Durbin-Watson stat | 2.18 | |||
Short-Run Diagnostic Tests | ||||
Test | F-statistic | Prob. Value | ||
NORMAL | 0.82 | 0.6623 | ||
SERIAL | 0.38 | 0.6916 | ||
ARCH | 0.50 | 0.4865 | ||
RESET | 0.42 | 0.5261 |
Dependent Variable | Direction of Causality | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Short-Run | Long-Run | Joint Long and Short-Run Causality | |||||||||
ΔHDIt−1 | ΔCO2t−1 | ΔlnNRRt−1 | ΔHCt−1 | ΔGOVt−1 | ECTt−1 | ΔHDIt−1, ECTt−1 | ΔCO2t−1, ECTt−1 | ΔlnNRRt−1, ECTt−1 | ΔHCt−1, ECTt−1 | ΔGOVt−1, ECTt−1 | |
ΔHDI | … | −0.001 * [−13.481] | 0.068 * [6.160] | 0.209 * [3.593] | 0.052 [1.294] | −0.211 ** [−2.555] | … | −0.001 ** [−2.474] | 0.016 *** [1.723] | −0.233 * [−2.971] | 0.013 [0.767] |
ΔCO2 | −969.837 * [−9.472] | … | −65.564 [−6.025] | −202.747 [−4.03559] | −51.288 [−1.554] | −0.443 ** [−2.614] | −140.720 [−0.374] | … | −24.414 [−1.322] | 283.191 *** [1.815] | −6.261 [−0.183] |
ΔlnNRR | 14.792 * [5.628] | −0.015 * [−7.833] | … | 3.092 * [3.75806] | 0.782 [1.486] | −0.071 [−0.377] | −0.340 [−0.053] | −0.004 [−1.211] | … | −0.501 [−0.190] | 0.367 [0.632] |
ΔHC | 4.783 * [5.478] | −0.005 * [−8.756] | 0.323 * [6.271] | … | 0.253 [1.977] | −0.021 [−0.955] | 0.058 [0.246] | −5.77 × 10−05 [−0.438] | −0.010 [−0.855] | … | −0.007 [−0.331] |
ΔGOV | 18.910 * [5.531] | −0.019 * [−9.456] | 1.278 * [6.954] | 3.953 * [5.544] | … | 0.112 ** [2.629] | −2.305 [−1.253] | 0.001 [1.016] | −0.086 [−0.957] | 0.196 [0.258] | … |
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Elmassah, S.; Hassanein, E.A. Can the Resource Curse for Well-Being Be Morphed into a Blessing? Investigating the Moderating Role of Environmental Quality, Governance, and Human Capital. Sustainability 2022, 14, 15053. https://doi.org/10.3390/su142215053
Elmassah S, Hassanein EA. Can the Resource Curse for Well-Being Be Morphed into a Blessing? Investigating the Moderating Role of Environmental Quality, Governance, and Human Capital. Sustainability. 2022; 14(22):15053. https://doi.org/10.3390/su142215053
Chicago/Turabian StyleElmassah, Suzanna, and Eslam A. Hassanein. 2022. "Can the Resource Curse for Well-Being Be Morphed into a Blessing? Investigating the Moderating Role of Environmental Quality, Governance, and Human Capital" Sustainability 14, no. 22: 15053. https://doi.org/10.3390/su142215053