IDEAS home Printed from https://ideas.repec.org/a/bla/growch/v53y2022i1p452-469.html
   My bibliography  Save this article

Coal exploitation and income inequality: Testing the resource curse with econometric analyses of household survey data from northwestern China

Author

Listed:
  • Qi Wen
  • Jin Li
  • Kevin M. Mwenda
  • Daniel Ervin
  • Maya Chatterjee
  • David Lopez‐Carr

Abstract

Coal resources have always been an important driving force for macroeconomic growth and GDP growth in resource‐rich regions. However, this growth has also caused inequality of household income in developing regions. Using survey data on rural household livelihoods in Shenmu county, Shaanxi Province, in northwestern China, this paper analyzes the relationship between coal exploitation and income inequality. Four multivariate econometric analyses are developed. We find evidence for the resource curse theory of natural resource exploitation leading to inequality: the Gini coefficient for household revenue is discovered to be markedly related with the location of and participation in coal exploitation. Nevertheless, this correlation is not linear. Rather, household income inequality primitively rises with environmental and resource subsidies. We analyze the impacts of household income inequality and contrast the characteristics of household livelihood and location characteristics in the coal exploitation site of northern Shenmu with those in the whole survey site. Our statistical analysis shows that out‐migration, the level of total household income, and convenience of household transportation are the important elements devoting to household income in northern Shenmu, the coal resources endowment region. However, the environmental damage and pollution caused by coal exploitation has substantial negative impacts upon household income, especially for households not participating in coal activities. Overall, we found that coal exploitation did not develop local industries. Adversely, the ecological environment problem and the high subsidy for coal mining caused by the exploitation of coal resources have aggravated the inequality of household income in the sample areas. Additionally, the development of coal resources attracted youth labor from agriculture to the coal industry, which exacerbated the lack of labor force and weakened village agricultural productivity.

Suggested Citation

  • Qi Wen & Jin Li & Kevin M. Mwenda & Daniel Ervin & Maya Chatterjee & David Lopez‐Carr, 2022. "Coal exploitation and income inequality: Testing the resource curse with econometric analyses of household survey data from northwestern China," Growth and Change, Wiley Blackwell, vol. 53(1), pages 452-469, March.
    • Handle: RePEc:bla:growch:v:53:y:2022:i:1:p:452-469
    DOI: 10.1111/grow.12592
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/grow.12592
    Download Restriction: no
    File URL: https://libkey.io/10.1111/grow.12592?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Fernando M. Arag?n & Juan Pablo Rud, 2013. "Natural Resources and Local Communities: Evidence from a Peruvian Gold Mine," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 1-25, May.
    2. Thondhlana, Gladman & Muchapondwa, Edwin, 2014. "Dependence on environmental resources and implications for household welfare: Evidence from the Kalahari drylands, South Africa," Ecological Economics, Elsevier, vol. 108(C), pages 59-67.
    3. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    4. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2004. "Reforms, Investment, and Poverty in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 395-421, January.
    5. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-380, November.
    6. Tsani, Stella, 2013. "Natural resources, governance and institutional quality: The role of resource funds," Resources Policy, Elsevier, vol. 38(2), pages 181-195.
    7. Fan, Shenggen & Zhang, Xiaobo, 2004. "Infrastructure and regional economic development in rural China," China Economic Review, Elsevier, vol. 15(2), pages 203-214.
    8. Auty, R. & Warhurst, A., 1993. "Sustainable development in mineral exporting economies," Resources Policy, Elsevier, vol. 19(1), pages 14-29, March.
    9. Yang, Xiuyun & Zhao, Heng & Ho, Peter, 2017. "Mining-induced displacement and resettlement in China: A study covering 27 villages in 6 provinces," Resources Policy, Elsevier, vol. 53(C), pages 408-418.
    10. Hunt Allcott & Daniel Keniston, 2018. "Dutch Disease or Agglomeration? The Local Economic Effects of Natural Resource Booms in Modern America," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(2), pages 695-731.
    11. W. W. Rostow, 1959. "The Stages Of Economic Growth," Economic History Review, Economic History Society, vol. 12(1), pages 1-16, August.
    12. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    13. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
    14. Erling Røed Larsen, 2006. "Escaping the Resource Curse and the Dutch Disease?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 65(3), pages 605-640, July.
    15. Pegg, Scott, 2012. "Social responsibility and resource extraction: Are Chinese oil companies different?," Resources Policy, Elsevier, vol. 37(2), pages 160-167.
    16. Gavin Wright & Jesse Czelusta, 2004. "WHY ECONOMIES SLOW: The Myth of the Resource Curse," Challenge, Taylor & Francis Journals, vol. 47(2), pages 6-38.
    17. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
    18. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    19. Shahbaz, Muhammad & Destek, Mehmet Akif & Okumus, Ilyas & Sinha, Avik, 2019. "An empirical note on comparison between resource abundance and resource dependence in resource abundant countries," Resources Policy, Elsevier, vol. 60(C), pages 47-55.
    20. Sovacool, Benjamin K. & Andrews, Nathan, 2015. "Does transparency matter? Evaluating the governance impacts of the Extractive Industries Transparency Initiative (EITI) in Azerbaijan and Liberia," Resources Policy, Elsevier, vol. 45(C), pages 183-192.
    21. Narain, Urvashi & Gupta, Shreekant & van 't Veld, Klaas, 2008. "Poverty and resource dependence in rural India," Ecological Economics, Elsevier, vol. 66(1), pages 161-176, May.
    22. Andrew F. Reeson & Thomas G. Measham & Karin Hosking, 2012. "Mining activity, income inequality and gender in regional Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 56(2), pages 302-313, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guodong Li & Hongzhi Wang & Zhaoxuan Liu & Honglin Liu & Haitian Yan & Zenwei Liu, 2022. "Effects of Aeolian Sand and Water−Cement Ratio on Performance of a Novel Mine Backfill Material," Sustainability, MDPI, vol. 15(1), pages 1-15, December.
    2. Xinyan Wu & Jinmei Ding & Bingjie Lu & Yuanyuan Wan & Linna Shi & Qi Wen, 2022. "Eco-Environmental Effects of Changes in Territorial Spatial Pattern and Their Driving Forces in Qinghai, China (1980–2020)," Land, MDPI, vol. 11(10), pages 1-20, October.
    3. Li, Mengxu & Liu, Jianghua & Chen, Yang & Yang, Zhijiu, 2023. "Can sustainable development strategy reduce income inequality in resource-based regions? A natural resource dependence perspective," Resources Policy, Elsevier, vol. 81(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).
    2. Lotfalipour, Mohammad Reza & sargolzaie, Ali & Salehnia, Narges, 2022. "Natural resources: A curse on welfare?," Resources Policy, Elsevier, vol. 79(C).
    3. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    4. Mignamissi, Dieudonné & Malah Kuete, Yselle Flora, 2021. "Resource rents and happiness on a global perspective: The resource curse revisited," Resources Policy, Elsevier, vol. 71(C).
    5. Valentine, Soumtang Bime & Itchoko Motande, Mondjeli Mwa Ndjokou & Salim Ahmed, Vessah Mbouombouo, 2024. "Revisiting natural resources and economic complexity nexus: Does financial development matter in developing countries?," Resources Policy, Elsevier, vol. 93(C).
    6. Chi-Swian Wong, 2021. "Science Mapping: A Scientometric Review on Resource Curses, Dutch Diseases, and Conflict Resources during 1993–2020," Energies, MDPI, vol. 14(15), pages 1-48, July.
    7. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Clark, Jeremy, 2017. "The evolution of the natural resource curse thesis: A critical literature survey," Resources Policy, Elsevier, vol. 51(C), pages 123-134.
    8. Julia Skretting, 2022. "Oil Windfalls and Regional Economic Performance in Russia," Working Papers No 02/2022, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
    9. Taner Turan & Halit Yanıkkaya, 2020. "Natural resource rents and capital accumulation nexus: do resource rents raise public human and physical capital expenditures?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 22(3), pages 449-466, July.
    10. Phoebe W. Ishak & Pierre-Guillaume Méon, 2020. "A resource-rich neighbor is a misfortune: The spatial distribution of the resource curse in Brazil," Working Papers CEB 20-001, ULB -- Universite Libre de Bruxelles.
    11. Frankel, Jeffrey A., 2012. "The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions," Scholarly Articles 8694932, Harvard Kennedy School of Government.
    12. Destek, Mehmet Akif & Adedoyin, Festus & Bekun, Festus Victor & Aydin, Sercan, 2023. "Converting a resource curse into a resource blessing: The function of institutional quality with different dimensions," Resources Policy, Elsevier, vol. 80(C).
    13. Chandan Sharma & Ritesh Kumar Mishra, 2022. "On the Good and Bad of Natural Resource, Corruption, and Economic Growth Nexus," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 889-922, August.
    14. Cheng, Zhonghua & Li, Lianshui & Liu, Jun, 2020. "Natural resource abundance, resource industry dependence and economic green growth in China," Resources Policy, Elsevier, vol. 68(C).
    15. Hilmawan, Rian & Clark, Jeremy, 2021. "Resource dependence and the causes of local economic growth: An empirical investigation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(03), January.
    16. Sambit Bhattacharyya, 2021. "Commodity boom‐bust cycles and the resource curse in Australia: 1900 to 2007," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 61(2), pages 186-203, July.
    17. Marques, António Cardoso & Pires, Patrícia Silva, 2019. "Is there a resource curse phenomenon for natural gas? Evidence from countries with abundant natural gas," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    18. Zuo, Na & Zhong, Hua, 2020. "Can resource policy reverse the resource curse? Evidence from China," Resources Policy, Elsevier, vol. 68(C).
    19. Ebeling, Francisco, 2022. "Can fossil fuel endowments steer economic development? Evidence from the linkages approach," Resources Policy, Elsevier, vol. 78(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:growch:v:53:y:2022:i:1:p:452-469. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0017-4815 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.