ICTs, growth, and environmental quality nexus: dynamic panel threshold regression

Revisiting the relationship between natural resources and environmental quality- can ICT break the "resource curse" in the environment?

Despite the prevalence of discussions on the "resource curse", the impact of natural resources on environmental quality for better or for worse has not been clearly answered, this study aims to answer the question by introducing the role of Information and Communication Technologies (ICT). To that end, by using the Instrumental Variable Generalized Method of Moments (IV GMM) estimator and a sample of 102 developing and emerging economies from 2006 to 2016, this paper studies the impact of ICT on the relationship between natural resources and environmental quality. Specially, the Environmental Performance Index (EPI) captures the environmental quality. The results show that natural resources have a significant negative effect on EPI, specially, EPI decreases by one unit with a 1% increase in natural resource rents. ICT significantly mitigates this adverse effect, and marginal effects analysis further confirms its positive moderate effects. The results proved to be robust by Lewbel 2SLS and Driscoll-Kraay techniques or other robust tests. It is noteworthy that the adverse effect of natural resources on EPI is greater and the mitigating effect of ICT is more pronounced in low-income countries and lower-middle income countries. Overall, these results remind resource-based countries to vigorously develop ICT, and apply intelligent exploration, digital monitoring, or other digital technologies to realize the high-efficiency use of natural resources, reducing environmental pollution and ecological damage.