Revisiting natural resources and financial development nexus in China under the lens of time-frequency approach

Examining the relationship between natural resources and financial development (FD) has been a crucial research area for several years. This study examines the time- and frequency-varying influence of natural resources on FD in China under the "resource curse" concept. In contrast to previous studies, additional economic factors such as economic policy uncertainty (EPU), technological innovation, gross fixed capital formation (GFCF), and government stability (GS) are also considered in the model. Wavelet approaches were used to examine the time- and frequency-based nexus among the variables, covering the period from 1995 to 2021. The outcomes indicate an adverse impact of natural resources on FD in long-term frequencies during the analyzed period, confirming the "resources curse" in China. The other variables, including technological innovation, gross fixed capital formation, and government stability, are positively linked, while EPU is negatively linked to FD. The policy implications of this study highlight the need for effective resource management, amplifying technological innovation, and efficient governments to spur FD in China.