Abstract

This study empirically examines the impact of natural resource rents (NRR), a proxy for economic benefits and costs of natural resources, on green growth (GG) in Organization for Economic Co-operation and Development (OECD) countries from 1996 to 2020, while accounting for the moderating roles of green innovations and environmental regulations. Using the Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) estimators as our baseline model, the analysis reveals a significantly negative association between natural resource rents and green growth in OECD countries, consistent with the resource curse hypothesis, which reflects heightened economic, institutional, and environmental risks associated with resource reliance. Furthermore, the results indicate that green innovations and environmental regulations not only promote green growth but also weaken the adverse association between natural resource rents and green growth, thereby suggesting their positive roles in managing resource-related risks. These findings remain robust across alternative variable definitions and model specifications. Overall, the empirical evidence highlights the importance of adopting policy measures, such as increased investment in sustainable technology research and development and providing incentives for firms to implement environmentally friendly practices, to manage resource-related risks and support the transition toward sustainable development.

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