Resource Abundance and Economic Growth in China
Rui Fan, Ying Fang, Sung Y. Park
China Economic Review
#002163 20131014 (published)
This paper revisits the resource curse phenomenon in China and differs from the previous studies in four respects: (i)City-level data isused; (ii)A spatial variable I sconstructed 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 signifficant evidence to support the existence of a resource curse phenomenon inChina.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.
JEL-Codes: O13; O18
Keywords: Resource curse; Diusion effects; Transmission channels; Functional coefficient model.

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