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The curse of natural resources: An empirical investigation of U.S. counties

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  • James, Alex
  • Aadland, David

Abstract

Research consistently shows that natural resource dependence tends to be associated with lower economic growth. However, the studies typically focus on differences across nations or states. We fill a gap in the literature by testing the so-called resource curse at a more disaggregated county level. Our results show clear evidence that resource-dependent counties exhibit more anemic economic growth, even after controlling for state-specific effects, socio-demographic differences, initial income, and spatial correlation. A case study analysis of Maine and Wyoming, and the counties within, highlight the growth effects of specializing in natural resource extraction.

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File URL: http://www.sciencedirect.com/science/article/B6VFJ-507BHMC-2/2/757ad42a26ed88ed922fc002320b441b
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Bibliographic Info

Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 33 (2011)
Issue (Month): 2 (May)
Pages: 440-453

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Handle: RePEc:eee:resene:v:33:y:2011:i:2:p:440-453

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Web page: http://www.elsevier.com/locate/inca/505569

Related research

Keywords: Natural resource curse Economic growth Convergence;

References

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  1. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
  2. Acemoglu, Daron, 1996. "A Microfoundation for Social Increasing Returns in Human Capital Accumulation," The Quarterly Journal of Economics, MIT Press, vol. 111(3), pages 779-804, August.
  3. Mehlum, Halvor & Moene, Karl-Ove & Torvik, Ragnar, 2003. "Institutions and the resource curse," Memorandum 29/2002, Oslo University, Department of Economics.
  4. David E. Bloom & David Canning & Jocelyn E. Finlay, 2010. "Population Aging and Economic Growth in Asia," NBER Chapters, in: The Economic Consequences of Demographic Change in East Asia, NBER-EASE Volume 19, pages 61-89 National Bureau of Economic Research, Inc.
  5. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
  6. Rappaport, Jordan & Sachs, Jeffrey D, 2003. " The United States as a Coastal Nation," Journal of Economic Growth, Springer, vol. 8(1), pages 5-46, March.
  7. Avinash Dixit, 1973. "The Optimum Factory Town," Bell Journal of Economics, The RAND Corporation, vol. 4(2), pages 637-654, Autumn.
  8. Matsuyama, K., 1992. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Working Papers e-92-3, Hoover Institution, Stanford University.
  9. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
  10. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
  11. Ning Ding & Barry C. Field, 2005. "Natural Resource Abundance and Economic Growths," Land Economics, University of Wisconsin Press, vol. 81(4).
  12. Sachs, Jeffrey D. & Warner, Andrew M., 1999. "The big push, natural resource booms and growth," Journal of Development Economics, Elsevier, vol. 59(1), pages 43-76, June.
  13. Richard Damania & Erwin Bulte, 2003. "Resources for Sale: Corruption, Democracy and the Natural Resource Curse," Centre for International Economic Studies Working Papers 2003-20, University of Adelaide, Centre for International Economic Studies.
  14. Gylfason, Thorvaldur, 2000. "Natural Resources, Education, and Economic Development," CEPR Discussion Papers 2594, C.E.P.R. Discussion Papers.
  15. John M. Quigley, 1998. "Urban Diversity and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 127-138, Spring.
  16. Auty, Richard M., 1994. "Industrial policy reform in six large newly industrializing countries: The resource curse thesis," World Development, Elsevier, vol. 22(1), pages 11-26, January.
  17. Matthew J. Higgins & Daniel Levy & Andrew T. Young, 2006. "Growth and Convergence across the United States: Evidence from County-Level Data," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 671-681, November.
  18. Bulte, Erwin H. & Damania, Richard & Deacon, Robert T., 2005. "Resource intensity, institutions, and development," World Development, Elsevier, vol. 33(7), pages 1029-1044, July.
  19. Matsuyama, K., 1992. "Agricultural Productivity, Comparative Advantage, and Economic Growth," Working Papers e-92-3, Hoover Institution, Stanford University.
  20. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
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Citations

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Cited by:
  1. Libman, Alexander, 2010. "Subnational resource curse: do economic or political institutions matter?," Frankfurt School - Working Paper Series 154, Frankfurt School of Finance and Management.
  2. Sarmidi, Tamat & Siong Hook, Law & Jafari, Yaghoob, 2012. "Resource curse: new evidence on the role of institutions," MPRA Paper 37206, University Library of Munich, Germany.
  3. Mark D. Partridge & Michael R. Betz & Linda Lobao, 2013. "Natural Resource Curse and Poverty in Appalachian America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 449-456.
  4. Deller, Steven C. & Schreiber, Andrew, 2012. "Frac Sand Mining and Community Economic Development," Staff Paper Series 565, University of Wisconsin, Agricultural and Applied Economics.
  5. James, Alexander G. & James, Robert G., 2011. "Do resource dependent regions grow slower than they should?," Economics Letters, Elsevier, vol. 111(3), pages 194-196, June.
  6. Vasilyeva, O., 2012. "Does Abundance of Natural Resources Impair Investments in Education? Case of Russian Regions," Journal of the New Economic Association, New Economic Association, vol. 14(2), pages 67-81.

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