Received: May 02, 2023 / Published: Dec 30, 2023
The association among financial development, trade openness, natural resources rent, government expenditure, and economic growth has been investigated by scholars, but the results have been controversial. This study attempts to examine the relationship among financial development, trade openness, natural resources rent, government expenditure, and economic growth in three Northeast Asian countries, namely China, Japan, and the Republic of Korea, between 1981 and 2020 using the fixed effect and random effect models. The results of the feasible generalized least squares model stated that economic growth of these countries can be fostered by financial development and trade openness. However, surprisingly, natural resources rent had a negative effect on the economic growth of the three countries in the region, while the relationship between government expenditure and economic growth was not statistically significant. Finally, policies are recommended to accelerate economic growth and achieve sustainable development for the region. First, financial development should be encouraged by improving domestic credit to the private sector. Second, trade openness should be facilitated to exploit competitive advantages in export-led growth, and science and technology. Finally, the countries should implement sustainable growth models to their reduce dependence on natural resources and achieve sustainable development for the region.
