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Natural Resources, Institutional Quality, and Economic Growth in China

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Listed author(s):
  • Kan Ji
  • Jan Magnus

    ()

  • Wendun Wang
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    Abstract

    The resource curse has been mainly studied using cross-country samples. In this paper we analyze a cross-province sample from one country: China. We focus on the interplay between resource abundance, institutional quality, and economic growth, using two different measures of resource abundance (a stock: resource reserves; and a flow: resource revenues), and employing various econometric approaches including varying coefficient models. We find that resource abundance has a positive effect on economic growth at the provincial level in China between 1990 and 2008, an effect that depends nonlinearly on institutional quality (1995 confidence in courts). The ‘West China Development Drive’ policy, initiated in 2000, caused substantial changes, which we investigate through a comparative panel-data analysis. Copyright Springer Science+Business Media Dordrecht 2014

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    File URL: http://hdl.handle.net/10.1007/s10640-013-9673-8
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    Article provided by Springer & European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

    Volume (Year): 57 (2014)
    Issue (Month): 3 (March)
    Pages: 323-343

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    Handle: RePEc:kap:enreec:v:57:y:2014:i:3:p:323-343
    DOI: 10.1007/s10640-013-9673-8
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    Keywords: Natural resource curse; Economic growth; China ; Institutional quality; Resource abundance; Policy change; Functional effect; O11; O13; O53; C21; Q0; Q33;

    Find related papers by JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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    1. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
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    5. van der Ploeg, Frederick & Poelhekke, Steven, 2010. "The pungent smell of "red herrings": Subsoil assets, rents, volatility and the resource curse," Journal of Environmental Economics and Management, Elsevier, vol. 60(1), pages 44-55, July.
    6. Auty, Richard M., 2001. "The political economy of resource-driven growth," European Economic Review, Elsevier, vol. 45(4-6), pages 839-846, May.
    7. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    8. 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.
    9. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    10. Xiaobo Zhang & Li Xing & Shenggen Fan & Xiaopeng Luo, 2008. "Resource abundance and regional development in China," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(1), pages 7-29, 01.
    11. Catherine Norman, 2009. "Rule of Law and the Resource Curse: Abundance Versus Intensity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(2), pages 183-207, June.
    12. Zongwu Cai & Jianqing Fan & Qiwei Yao, 2000. "Functional-coefficient regression models for nonlinear time series," LSE Research Online Documents on Economics 6314, London School of Economics and Political Science, LSE Library.
    13. Olken, Benjamin A., 2009. "Corruption perceptions vs. corruption reality," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 950-964, August.
    14. Bulte, Erwin H. & Damania, Richard & Deacon, Robert T., 2005. "Resource intensity, institutions, and development," World Development, Elsevier, vol. 33(7), pages 1029-1044, July.
    15. Papyrakis, Elissaios & Gerlagh, Reyer, 2007. "Resource abundance and economic growth in the United States," European Economic Review, Elsevier, vol. 51(4), pages 1011-1039, May.
    16. SHAO Shuai & QI Zhongying, 2009. "Energy exploitation and economic growth in Western China: An empirical analysis based on the resource curse hypothesis," Frontiers of Economics in China, Higher Education Press, vol. 4(1), pages 125-152, March.
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    Cited by:

    1. Dong-Hyeon Kim & Shu-Chin Lin, 2017. "Natural Resources and Economic Development: New Panel Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 363-391, February.
    2. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    3. Zhu, Qingyun & Sarkis, Joseph, 2016. "Green marketing and consumerism as social change in China: Analyzing the literature," International Journal of Production Economics, Elsevier, vol. 181(PB), pages 289-302.
    4. Iacono, Roberto, 2016. "No blessing, no curse? On the benefits of being a resource-rich southern region of Italy," Research in Economics, Elsevier, vol. 70(2), pages 346-359.

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