Work

Are natural resources a curse on the distributional consequences of financial development?

Year: 2026

Type: article

Abstract: This paper examines how natural resource dependence shapes the distributional effects of financial development in developing economies. Using a balanced panel of 90 countries from 1995 to 2022 and dynamic panel and nonlinear threshold methods, we show that financial development reduces wealth inequality when resource dependence is low, but this effect weakens and can reverse once resource rents exceed a critical threshold. The findings highlight the importance of financial‐sector reforms and economic diversification strategies that account for resource dependence when addressing wealth inequality.

Source: Contemporary Economic Policy

DOI: 10.1111/coep.70049

Authors: Dong‐Hyeon Kim, Shu‐Chin Lin, Peiyao Liu

Institutions: Korea University, Sungkyunkwan University, Shandong University of Finance and Economics

Language: English

Topic: Natural Resources and Economic Development

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Reduced inequalities, No poverty

Open Access status: hybrid

Estimated APC paid: $2,970