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Coal busts and urban recovery: Evidence from China

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  • Zhang, Haoran

Abstract

In this paper, we investigate the effects of a coal bust on urban growth. Using a difference-in-differences framework, we find that China's 2012–2015 coal bust significantly reduced the growth rate of local GDP, especially in coal producing cities located far from the coast or seaports. This negative growth effect decreased one year after coal prices had recovered, but the level of the effect remained relatively persistent. The results of further analysis show that regional economies adjust to adverse shocks primarily through a reduction in urban employment and the exit of small and geographically disadvantaged firms, as the decrease in wages during a bust is insufficient to attract an inflow of firms and capital.

Suggested Citation

  • Zhang, Haoran, 2023. "Coal busts and urban recovery: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:regeco:v:101:y:2023:i:c:s016604622300056x
    DOI: 10.1016/j.regsciurbeco.2023.103921
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    More about this item

    Keywords

    Coal bust; Industry-specific shocks; Economic growth; Urban recovery;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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