Relative Resource Curse Theory And Its Chinese Empirical Study

Abundant resource and its extraction do not promote economic growth and societal development rapidly in some provinces of China that is revealed by our simple statistical description and a majority of Chinese literatures. Furthermore, the studies on Resource Curse are constantly controversial for nearly 50 years. For these actual and theoretical reasons it is necessary to explore "Resource Curse" hypothesis in-depth and discuss influence on economic development of resource abundance in China. Therefore the relationship between resource abundance and resident income is entry point of the doctoral dissertation in order to study comprehensively Resource Curse theoretical proposition and its working performance in China.The object of this dissertation is to derive, describe, and measure the relationship between resource abundance and resident income and their mechanism of action. Firstly, the paper consider a two sector model of growth and level effects from resource abundance based on endogenous economic growth theory and Dutch Disease model which derive both the static and the dynamic properties of an economy rich in exhaustible natural resource. The result shows that an economy like this has higher per capita income levels but lower per capita income growth rates which of theoretical propositions a called "Semi Resource Curse" (SRC). Secondly, the effects on per capita income level, per capita income growth and per capital income distribution from resource abundance are described and measured making use of both pooled cross-sectional data and panel data in which province is the basic unit of analysis with the purpose of examining the applicability in China of SRC. Afterwards plenty of works is finished for robustness test. Simultaneously, the impacts of stage of economic development and different properties of resource abundance which include resource reserves, resource output, resource export, resource distribution, resource variety and resource boom, are examined in the process of testing SRC. Thirdly, the transmission mechanisms of SRC are investigated with both pooled cross-sectional data and panel data. The effects and relative importance of different transmission channels are calculated, and then as a basis of which the direct income effect, the indirect income effect and total income effects from resource abundance are received. Then the paper deducts and calculates the threshold effect of human capital, on SRC. Finally, some policy recommendations are advised according to our theory and empirical conclusions.The main conclusions of the dissertation are as follows. In the first place, SRC are proved theoretically and empirically. The Chinese provincial data demonstrate that resource abundance has reduced per capita income growth, while has increased per capita income level of resident and has narrowed per capita income gap between urban residents and rural people since 1986. The SRC proposition has been being existed stability proved by all robustness tests which distinguish different economic periods, different data structure, different regression methods and different properties of resource abundance. Secondly, the direct income effect, indirect income effect and total income of resource abundance has been accumulated built on examination of SRC any transmissions mechanisms and their relative importance. The direct effect of resource abundance was semi resource curse steadily while indirect effect was alterable the positive influence of which stemmed from higher human capital stock and larger manufacturing scale and the negative influence of which derived from worse institution quality. The total effect of resource abundance was welfare from 1986 to 2007, however, which changed into SRC from 1999 to 2007. The above statement shows that the disadvantages and adverse influence of resource development is emerging gradually. Thirdly, different properties of resource abundance attributed to different income effect. The resource reserves increased per capita income level, dropped per capita income growth rate and widened per capita income gap among residents all of which were not significant statistically. The resource output increased per capita income level and lowered per capita income growth rate all of which had highly statistical significance. The resource export increased per capita income level and per capita income growth rate which of positive effect on income growth rate was significant statistically. The resource distribution improved per capita income level and per capita income growth all of which coefficients were small and had no statistical significance. The natural gas production had welfare income effect, petroleum production had semi curse income effect, and coal production had absolutely curse income effect. All these conclusions show that the root of SRC may be the effects on economic structure, not be resources abundance itself.Fourthly, the threshold effect of human capital on SRC is derivate with theory and mathematics instrument and is tested and accumulated empirically with Chinese Province data. The dissertation demonstrates that the average years of education of people could improve the per capita income level and growth rate, and narrow the existing income gap significantly. The paper shows that ceteris paribus, the negative effect from resource abundance on per capita income growth would disappear if the average years of education achieves to 12.5 years.