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Resource abundance and economic growth in China

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  • Fan, Rui
  • Fang, Ying
  • Park, Sung Y.

Abstract

This paper revisits the resource curse phenomenon in China and differs from the previous studies in four respects: (i) City-level data is used; (ii) A spatial variable is constructed to estimate the diffusion effect of natural resources among cities in the same province; (iii) The impact of resource abundance on economic development is investigated not only at the city level but also at the prefectural level in China; (iv) We use a functional coefficient regression model to deal with city-specific heterogeneity and, at the same time, analyze the transmission mechanism of the resource curse phenomenon. Our empirical results show that there is no significant evidence to support the existence of a resource curse phenomenon in China. On the other hand, we find that the degree of natural resource abundance in a city has a positive diffusion effect on the economic growth of neighboring cities within the same province at the city level, but not at prefectural levels. We attribute this to the urban bias policy.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:chieco:v:23:y:2012:i:3:p:704-719
    DOI: 10.1016/j.chieco.2012.04.007
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    Cited by:

    1. Charlier, Christophe & Guillou, Sarah, 2014. "Distortion effects of export quota policy: an analysis of the China-Raw Materials dispute," China Economic Review, Elsevier, vol. 31(C), pages 320-338.
    2. Xu, Xiaoliang & Xu, Xuefen & Chen, Qian & Che, Ying, 2015. "The impact on regional “resource curse” by coal resource tax reform in China—A dynamic CGE appraisal," Resources Policy, Elsevier, vol. 45(C), pages 277-289.
    3. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    4. Kan Ji & Jan Magnus & Wendun Wang, 2014. "Natural Resources, Institutional Quality, and Economic Growth in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(3), pages 323-343, March.
    5. 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.
    6. Shahbaz, Muhammad & Ahmed, Khalid & Tiwari, Aviral Kumar & Jiao, Zhilun, 2019. "Resource Curse Hypothesis and Role of Oil Prices in USA," MPRA Paper 96633, University Library of Munich, Germany, revised 14 Oct 2019.

    More about this item

    Keywords

    Resource curse; Diffusion effects; Transmission channels; Functional coefficient model;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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