Natural Resources Price Volatility and FinTech: Implications for Economic Recovery in Post-covid-19 Era

Abstract

For over three decades, linking natural resources to economic growth remained a debatable topic. Covid-19 has triggered an economic downturn worldwide and fostered volatility in natural resource price (NRP). Due to the rising unprecedented situations (e.g., uncertainty in natural resources and global economic recession during the Covid-19 era), it becomes more important to understand the volatility in NRP since both natural resource prices and FinTech (financial technology) are crucial for economic growth, which is relatively understudied. NRP volatility may be detrimental to the world's economic development, and FinTech may be positively connected to economic recovery from sequential Covid-19 shocks. The current study, therefore, seeks to examine the relationship between NRP and FinTech on economic recovery from Covid-19 over a period of 1991-2021. The research findings depict the presence of cointegration between the study variables. This study applied dynamic OLS (DOLS), Canonical cointegrating regression (CCR), and fully modified (FMOLS) as long-run estimators. The findings suggest a negative impact of NRP volatility on worldwide economic growth. While oil rents, natural gas rents, and FinTech support worldwide economic growth. In addition to this, the results confirmed the interaction effect of FinTech and TNR increases worldwide economic growth. This research concludes that volatility in NRP is harmful to worldwide economic growth. However, better FinTech can significantly transmute the adverse effects of NRP volatility toward the positive side.