The impact of natural resources and gross capital formation on economic growth in the context of globalization: evidence from developing countries on the continent of Europe, Asia, Africa, and America

The aim of this paper is to investigate the nexus between natural resources, gross capital formation, globalization, and economic growth in the developing countries from European, Asian, African, and American continents. It adopted the panel vector autoregression (PVAR) approach to test this relationship for the period from 1980 to 2018. Results suggest that natural resources and globalization have a positive impact on economic growth in European, Asian, and American countries, while capital formation negatively affects growth. In African countries, the effect of globalization and gross capital formation is positive, but natural resources have a negative impact on GDP. Evidence from all continents illustrate that there is bidirectional causality between globalization and economic growth. Also, there is bidirectional causality detected between capital formation and growth in Europe and Asia and between natural resources and growth in Asia and America, while there is unidirectional causality from GDP to natural resources in Europe, from capital formation to GDP in Africa and America, from GDP to natural resources in Europe, and from natural resources to GDP in America. Based on these results, it can be said that new growth models can no longer be independent of natural resource rents and globalization.