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Resource abundance and regional development in China

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Author Info

  • Xiaobo Zhang
  • Li Xing
  • Shenggen Fan
  • Xiaopeng Luo

Abstract

Over the past several decades, China has made tremendous progress in market integration and infrastructure development. Demand for natural resources has increased from the booming coastal economies, causing the terms of trade to favour the resource sector, which is predominantly based in the interior regions of the country. However, the gap in economic development level between the coastal and inland regions has widened significantly. In this paper, using a panel dataset at the provincial level, we show that Chinese provinces with abundant resources perform worse than their resource-poor counterparts in terms of per capita consumption growth. This trend that resource-poor areas are better off than resource-rich areas is particularly prominent in rural areas. Because of the institutional arrangements regarding property rights of natural resources, most gains from the resource boom have been captured either by the government- or state-owned enterprises. Thus, the windfall of natural resources has more to do with government consumption than household consumption. Moreover, in resource-rich areas, greater revenues accrued from natural resources bid up the price of non-tradable goods and hurt the competitiveness of the local economy. Copyright (c) 2008 The Authors Journal compilation (c) 2008 The European Bank for Reconstruction and Development .

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Bibliographic Info

Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.

Volume (Year): 16 (2008)
Issue (Month): 1 (01)
Pages: 7-29

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Handle: RePEc:bla:etrans:v:16:y:2008:i:1:p:7-29

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Cited by:
  1. repec:wyi:wpaper:002007 is not listed on IDEAS
  2. Yuxiang, Karl & Chen, Zhongchang, 2011. "Resource abundance and financial development: Evidence from China," Resources Policy, Elsevier, vol. 36(1), pages 72-79, March.
  3. Elissaios Papyrakis & Ohad Raveh, 2013. "An Empirical Analysis of a Regional Dutch Disease: The case of Canada," OxCarre Working Papers 106, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  4. Liu, Yaobin, 2014. "Is the natural resource production a blessing or curse for China's urbanization? Evidence from a space–time panel data model," Economic Modelling, Elsevier, vol. 38(C), pages 404-416.
  5. Wang, W., 2013. "Essays on model averaging and political economics," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5928130, Tilburg University.
  6. repec:wyi:journl:002163 is not listed on IDEAS
  7. Martin Wielemaker & Eric Gedajlovic, 2011. "Governance and capabilities: Asia’s entrepreneurial performance and stock of venture forms," Asia Pacific Journal of Management, Springer, vol. 28(1), pages 157-185, March.
  8. Kan Ji & Jan Magnus & Wendun Wang, 2014. "Natural Resources, Institutional Quality, and Economic Growth in China," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 57(3), pages 323-343, March.
  9. Ji, K. & Magnus, J.R. & Wang, W., 2010. "Resource Abundance and Resource Dependence in China," Discussion Paper 2010-109, Tilburg University, Center for Economic Research.
  10. Yaobin Liu, 2013. "Energy Production and Regional Economic Growth in China: A More Comprehensive Analysis Using a Panel Model," Energies, MDPI, Open Access Journal, vol. 6(3), pages 1409-1420, March.
  11. Ji, K., 2013. "Essays on tax policy, institutions, and output," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5928131, Tilburg University.
  12. Fan, Rui & Fang, Ying & Park, Sung Y., 2012. "Resource abundance and economic growth in China," China Economic Review, Elsevier, vol. 23(3), pages 704-719.
  13. Ohad Raveh, 2013. "Dutch Disease, Factor Mobility, and the Alberta Effect - The case of federations," OxCarre Working Papers 100, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.

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