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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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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

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Keywords: Natural resource curse Economic growth Convergence;

References

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  1. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
  2. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
  3. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2002. "Institutions and the resource curse," Development and Comp Systems 0210003, EconWPA.
  4. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
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  6. Edward B. Barbier, 2005. "Natural Resource-Based Economic Development in History," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(3), pages 103-152, July.
  7. Gernot Doppelhofer & Ronald I. Miller & Xavier Sala-i-Martin, 2000. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (Bace) Approach," OECD Economics Department Working Papers 266, OECD Publishing.
  8. John M. Quigley, 1998. "Urban Diversity and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 127-138, Spring.
  9. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
  10. Bulte Erwin & Damania Richard, 2008. "Resources for Sale: Corruption, Democracy and the Natural Resource Curse," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-30, February.
  11. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
  12. 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.
  13. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
  14. 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.
  15. 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.
  16. repec:fth:stanho:e-92-3 is not listed on IDEAS
  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. Ning Ding & Barry C. Field, 2005. "Natural Resource Abundance and Economic Growths," Land Economics, University of Wisconsin Press, vol. 81(4).
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Citations

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Cited by:
  1. Xu, Hangtian & Nakajima, Kentaro, 2013. "The Role of Coal Mine Regulation in Regional Development," PRIMCED Discussion Paper Series 45, Institute of Economic Research, Hitotsubashi University.
  2. Stratford Douglas & Anne Walker, 2014. "Coal Mining and the Resource Curse in the Eastern United States," Working Papers 14-01, Department of Economics, West Virginia University.
  3. 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.
  4. 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.
  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. Deller, Steven C. & Schreiber, Andrew, 2012. "Frac Sand Mining and Community Economic Development," Staff Paper Series 565, University of Wisconsin, Agricultural and Applied Economics.
  7. Brown, Jason, 2014. "Production of natural gas from shale in local economies: a resource blessing or curse?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 1-29.
  8. Libman, Alexander, 2010. "Subnational resource curse: do economic or political institutions matter?," Frankfurt School - Working Paper Series 154, Frankfurt School of Finance and Management.
  9. Fleming, David A. & Measham, Thomas G., 2013. "Disentangling the Natural Resources Curse: National and Regional Socioeconomic Impacts of Resource Windfalls," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150526, Agricultural and Applied Economics Association.
  10. Michael Alexeev & Andrey Chernyavskiy, 2014. "Natural Resources And Economic Growth In Russia’s Regions," HSE Working papers WP BRP 55/EC/2014, National Research University Higher School of Economics.
  11. 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.
  12. Angeliki N. Menegaki, 2013. "An Antidote to the Resource Curse: The Blessing of Renewable Energy," International Journal of Energy Economics and Policy, Econjournals, vol. 3(4), pages 321 - 332.
  13. Ali Taiebnia & Gity Shakeri, 2012. "The Impact of Oil Price Rise on Industrial Production," Iranian Economic Review, Economics faculty of Tehran university, vol. 17(1), pages 13-31, winter.

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