Government effectiveness towards economic recovery and value addition in natural resource market: Asymmetric analysis of Chinese green economy

• Published in: Resources policy 2023-06, Vol.83, p.103649, Article 103649
• Main Authors: Lv, Xiaoting, Shan, Haipeng, Zheng, Jiajia, A. Nassani, Abdelmohsen, H. Binsaeed, Rima, The Cong, Phan, Thuy Vinh, Nguyen Thi
• Format: Article
• Language: English
• Subjects: Governance; Government effectiveness; Greeneconomy; NARDL; Natural resource market
• ISSN: 0301-4207
• DOI: 10.1016/j.resourpol.2023.103649

The study intends to investigate the impact of government effectiveness on the value addition of China's natural resource market along with other explanatory variables like GDP per capita, energy intensityfor the years 1996–2021.Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests are employed to ensure that the variables are stationary and that the findings validate that variables are integrated as order 1. Based on the non-linear autoregressive distributed lag (NARDL), estimates shows the asymmetric impact of government effectiveness on the value addition of the natural resource market both in the long run and in the short run.Moreover, Wald test and the dynamic multiplier graphs also confirm this asymmetric relationship. Hence, a positive shock to the government's effectiveness reduces the natural resource rent and adds value to the natural resource market by improving the market efficiency. While a negative shock diminishes the value addition in the natural resource market by raising the natural resource rent and reducing the market efficiency.The study suggests that the government should increase its efforts to enhance resource market efficiency and continue to explore new markets to add value to its resource market. •This study investigates the impact of government effectiveness towards economic recovery and natural resource value addition.•The analysis is performed for China's economy over the period of 1996–2021.•Non-linear Autoregressive Distributed Lag (NARDL) model is used for empirical investigation.•The study's results validate the asymmetric association between government effectiveness and natural resource value addition.