Natural resource rents, bank stability, and the climate-related energy transition: evidence from developed and developing countries

This study examines the impact of natural resource rents on the energy transition, with particular attention to the moderating role of bank stability. Using a balanced panel of 111 countries over the period 2010–2021, the empirical analysis is conducted through the Method of Moments Quantile Regression (MMQR) estimators. To capture cross-country heterogeneity, the full sample is further divided into 43 developed and high income and 68 developing/emerging economies. The results consistently show that natural resource rents exert a negative and significant influence on the progress of the energy transition across the full sample, as well as within both developed and developing country groups. Moreover, bank stability does not appear to foster the energy transition in the overall sample or in developing economies. In contrast, it exerts a positive and significant effect in developed countries. Finally, the interaction between natural resource rents and bank stability enhances the energy transition process in both groups of countries, indicating that stable banking systems can mitigate the adverse impact of resource dependence. These findings suggest that resource dependence remains a structural barrier to advancing clean energy pathways, regardless of the level of economic development, and highlight the relevance of banking sector stability in shaping sustainable energy outcomes.