The role of forest resources, mineral resources, and oil extraction in economic progress of developing Asian economies

This study determines the role of natural resources’ utilization, foreign direct investment (FDI), and fossil fuel consumption in economic growth by utilizing panel data of 25 developing Asian countries from the period 1996 to 2016. Pool Mean Group (PMG) regression is used for this purpose, and the results show that the rent received from forests has a sizeable share in the economic growth of developing Asian Countries. The study shows that an increase in FDI is stimulating economic growth in developing countries. However, although the utilization of natural resources has a positive impact on economic growth, the results show a statistically insignificant role of natural resources in improving economic growth. Finally, the results show that the rent obtained from forest resources, mineral resources, and oil extraction makes a significant contribution to economic growth. The findings highlight that FDI and the rent received from the pool of natural resources are significant contributors to economic growth, as they are both helping to develop industrialization in the nations concerned and improve the level of per capita income. However, the findings also suggest that there is a need to consider the limited availability of natural resources and to deal with this situation by (a) developing policies that can ensure the efficient use of such rent received from the natural resources by importing advanced technologies from developed nations and (b) using the rents from natural resources to promote the business environment and attract FDI in developing countries. •The rent received from forests has a sizeable share in the economic growth of developing Asian economies.•The rent obtained from forest resources makes a significant contribution to economic growth.•The rent obtained from mineral resources and oil extraction is fostering economic growth.•Utilization of natural resources has a positive but insignificant impact on economic growth.•The study shows that increase in FDI is stimulating economic growth in developing Asian countries.