Does geopolitical risk impact the natural resources—Economic growth nexus?

Abstract

AbstractThe existing literature on resource economics extensively probes the validity of the natural resource curse hypothesis; nevertheless, the empirical evidence at the global scale is relatively sparse. Further, the literature ignores the combined impact of geopolitical risk (GPR) and natural resources (NRR) on economic growth (EG). Based on this, we examine whether the natural resource curse hypothesis holds at the global level. Moreover, we investigate the combined impact of NRR and GPR on EG. We adopt the novel Fourier‐augmented ARDL method to provide reliable outcomes. The results delineate that NRR upsurge EG, thereby invalidating the resource curse hypothesis. Contrarily, the combined impact of NRR and GPR on EG is negative, thus, validating the resource curse hypothesis. We recommend a series of policy suggestions based on the outcomes.