Natural resources led financing of investment: A prospect of China's provincial data

Zhang, Cong; Teng, Wei

doi:10.1016/j.resourpol.2023.104164

Cited by 1 publication

(3 citation statements)

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“…This section explains how the flow of natural resource revenue-sharing funds has the potential to influence local government investment in infrastructure in several ways so that investment in infrastructure is a very important long-term investment [ 84 ]. Natural resources can drive investment in infrastructure [ 13 , 20 , 85 ]. Quality infrastructure will be key to improving welfare and development in a region.…”

Section: Discussionmentioning

confidence: 99%

“…A country's development index is often described through the work of its people related to the utilization of natural resources [11,12]. Currently, the direction of world development is no longer only focused on the welfare of the present, but must also ensure a better situation in the future [13][14][15][16]. Sustainable development is the basic guideline for the direction of global development, which pays more attention to social, economic and environmental life in a balanced manner [17,18].…”

Section: Introductionmentioning

confidence: 99%

“…Some studies explain that economic growth can be triggered through infrastructure investment. That is, increasing infrastructure development capital contributes to economic growth [ 13 , 19 , 20 ]. Countries can escape the resource curse if they use revenues from natural resources for public investment [ 21 ].…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Government infrastructure investment stimulation through booming natural resources: Evidence from a lower-middle-income country

Hidayat,

Supartoyo,

Setiawan

et al. 2024

PLoS ONE

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The dynamics of central government funding to regions depend on local investments. In regional autonomy, local governments are encouraged to be more self-reliant from the central government. For regions with high natural resource yields, they will not encounter difficulties in meeting their fiscal needs. Community welfare can be realized through fulfilling basic needs, one of which is infrastructure development. High-quality infrastructure will be able to contribute to further progress in trade, thus enhancing production efficiency. The objective of this research is to analyze the extent of the influence of central government transfer funds, especially the Natural Resource Revenue Sharing Funds (DBH SDA), on local government investments in infrastructure across 508 districts/cities in Indonesia. The method used is dynamic panel regression using the Generalized Method of Moment (GMM) Arellano-Bond approach. This study finds that the role of DBH SDA is still low in infrastructure spending. The role of the central government remains significant in determining infrastructure spending at the district/city level in Indonesia. This indicates that local governments rely more on other sectors in infrastructure investment. By enhancing the role of DBH SDA through technological advancements, it is hoped that the market value of natural resources can be higher through resource downstreaming. This strategy will have broader impacts, as labor needs can be absorbed not only in raw material production activities but also in the processing technology sector. Furthermore, the utilization of natural resources with modern technology can increase extraction efficiency, support sustainable development, and minimize environmental impacts.

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Section: Discussionmentioning

confidence: 99%