Natural resource abundance, natural resource-oriented industry dependence, and economic growth: Evidence from the provincial level in China

By Sanmang Wu, Li Li, Shantong Li. Resources, Conservation and Recycling, 2018

160 citations recorded by the source corpus.

Abstract The “natural resource curse” thesis states that having an abundant natural resource is not a favorable condition but is rather a limitation on economic growth. This study, which distinguishes the difference between natural resource abundance and natural resource-oriented industry dependence, proposes relevant hypotheses and conducts empirical tests using panel data at the provincial level in China. The research findings are as follows: first, an abundant natural resource is a favorable basis for economic growth. Second, the “natural resource curse” refers to a situation in which a region’s economic development is overly dependent on its natural resource-oriented industries, which leads to negative effects on both medium and long-term economic growth. Third, natural resource-oriented industry dependence indirectly inhibits economic growth through three transmission mechanisms: the crowding-out effect by inhibiting human capital, technology innovation and foreign investment; the Dutch disease effect, which cripples the development of manufacturing; and the institution weakening effect, reflected by the increase in government intervention. This study has further enriched our understanding of the “natural resource curse” thesis.

Subfields: Building and Construction, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/1e22313b9e024785a5431e48816797e203e57fb4

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