Research

Research

Working Papers
Location: Home -> Research -> Working Papers -> Content

The “Curse of Resources” Revisited: A Different Story from China

id: 2007 Date: 20131014 status: published Times:
AuthorYing Fang, Li Qi, Yang Zhao
ContentWhether natural resources boost or deter economic development remains an open question in the literature. Papyrakis and Gerlagh (2007) found a significant negative association between economic growth and resource abundance at a U.S.-state level. They demonstrated that resource abundance crowds out human capital accumulation and R&D investment. This paper performs an empirical analysis on data from 95 cities in China from 1997 to 2005 and finds no obvious evidence of a significant relationship between natural resources and economic development at the city level. By controlling province dummy variables, however, it becomes clear that resource abundance in one city imposes a significant positive “spill-over” effect on the other cities within the same province. Moreover, an analysis on transmission channels of such spill-over effects reveals that resource abundance boosts the manufacturing industry in the other cities, which is consistent with the “big push” theory.
JEL-CodesO13, O18
KeywordsCurse of resources; Spill-over effects; Big push
TOP