Are natural resources a curse on the distributional consequences of financial development?

Abstract This paper examines how natural resource dependence shapes the distributional effects of financial development in developing economies. Using a balanced panel of 90 countries from 1995 to 2022 and dynamic panel and nonlinear threshold methods, we show that financial development reduces wealth inequality when resource dependence is low, but this effect weakens and can reverse once resource rents exceed a critical threshold. The findings highlight the importance of financial‐sector reforms and economic diversification strategies that account for resource dependence when addressing wealth inequality.