| Regions with abundant resources are inclined to confront a development dilemma:the abundance of natural resources leads paradoxically to economic stagnation.Provinces in central and western regions have been the main basement of energy production and energy supply for the whole country.The great advantages of natural resources have facilitated these two regions to foster the development of resource-based industries.Consequently,most provinces are trapped in the development pattern highly dependent on natural resources.However,it is an unsustainable model that these provinces have deeply relied on.Resource-based industries are featured with fewer inputs,shorter investment cycles,and higher profit.Due to the illusion induced by the windfall of natural resources,resource-abundant regions consider resource-based industries as the main sector in the whole economy.The development pattern highly relied on the natural resource sector triggers a siphon effect,and thus causes the Dutch disease effect（DDE）.The natural resource boom pushes up the marginal return of production factors in the natural resource sector because of extra demand on labor or capital.Eventually,production factors in the manufacturing sector will be attracted to move out and into the natural resource sector.Hence,the manufacturing sector tends to cut down the production scale and therefore lags behind.What’s worse,since the manufacturing sector is the pilot of technology innovation due to learning by doing effect or technological spillovers,the crowd-out of the manufacturing sector could reduce the long-term economic growth.This adverse outcome becomes more notable when the non-renewable resources were depleted out.Therefore,given that the Chinese economy has entered the new normal era,with a lower economic growth rate and lower energy demand growth rate as well as a deteriorated environment,it is imperative for resource-based regions to formulate a feasible countermeasure.Recently,China has launched a series of fiscal reforms to improve the national taxation system and to construct a modern fiscal institution.Among these reforms,the reform of resource taxation is one of the important elements.Resource taxation reform is conducive to clarify the fiscal relationship between the central and local governments and achieve the economical utilization of natural resources.Moreover,it is also meaningful for speeding up the construction of ecological civilization and realizing the dream of beautiful China.To a large extend,furthering the resource taxation reform in all-round not only reflects the new concept of green development but also is highly related to the sustainable development of resource-based regions.After implementing the pilot of resource taxation reform in Xinjiang in2010,the reform has been spread among other provinces.The current resource taxation system made a great change in the following aspects: the widening tax base,the shift from specific tax to ad valorem tax,the release in the power of taxation management for local governments.Certainly,the resource taxation reform is of great significance for resource-based regions.For one thing,ad valorem tax is highly related to the energy prices,which means the role of taxation adjustment can be played thoroughly.For another thing,local governments have flexible power to impose resource taxation.In this sense,local governments can improve the reasonable exploitation of natural resources to the limit and manage the taxation revenue in a way of fostering economic development and the social benefits.In a word,considering the numerous benefits generated by the reform,the deep reform of resource taxation in all-round provides a great opportunity for resource-based regions to relieve or avoid the regional Dutch disease effect.The nexus between the natural resource boom and the development of manufacturing has received attention when scholars investigated the resource curse.However,little attention has been paid to the explicit mechanism.It must be pointed out that previous literature hardly explored this topic targeted at China,the largest developing country in the world.Also,when it comes to the countermeasures on avoiding the resource curse or the Dutch disease effect in the Chinese resource-based regions,existing studies neglected the role of governments in windfall management and the effect of resource taxation.In fact,resource taxation is an important tool in economic management.Considering that natural resources are of fundamental and predominant importance in social and economic development,the resource taxation reform could generate a potential chain effect.Besides,as a by-product of natural resources,the impact of resource taxation revenue on regional development is hard to be ignored.To fill in such a research gap,this paper first investigates the regional DDE within China and then examines the impact of resource taxation reform on the regional DDE.Specifically,this paper aims to reveal the existence of the regional DDE,and also verify the resource taxation reform featured by ad valorem tax could be good medicine for cure the regional DDE within China.What this paper delves into could provide resource-based regions with some policy implications on responding to the current international and domestic situations as well as securing local economic transformation and sustainable development.This paper first summarizes the evolution of China’s resource taxation reform.Besides,this paper makes a simple comparison between the natural resource sector and manufacturing sector based on indicators including inputs,wages,and output,to identify some stylized facts on the regional DDE within China.Second,this paper constructs a theoretical model consisting of three sectors: the natural resource sector,manufacturing,and government sector.In particular,this model incorporates resource taxation through public goods supported by governments as a production factor for the technology accumulation,and therefore shows the relationship among the natural resource boom,resource taxation,and manufacturing development.To verify the effect of resource taxation reform on the regional DDE,this paper further analyzes the different amounts of revenues in terms of two kinds of tax payment: one is the specific tax and the other is the ad valorem tax.There are four conclusions from the theoretical model.First,the natural resource boom hinders the development of manufacturing,which causes a regional DDE.Second,the increase in resource taxation revenue improves the total factor productivity（TFP）in manufacturing,which fosters the development of manufacturing.Third,compared with the specific tax,the government could gather more revenue from natural resource sector by imposing the ad valorem tax.Fourth,through two mechanisms,i.e.,the fiscal revenue effect and the TFP growth effect,the resource taxation reform is beneficial for resource-based regions to relieve or avoid the regional DDE.Following the theoretical propositions,this paper further performs three empirical examinations using the macro and micro databases in China:（1）identifying the regional DDE within China;（2）analyzing the impact of resource taxation reform on the regional DDE;（3）verifying the underlying mechanisms related to the impact of resource taxation reform on the regional DDE.First of all,considering an obvious spatial correlation among economic outcomes,this paper applies the spatial Durbin model into analyzing the effect of the natural resource boom on the manufacturing development.This paper also constructs two spatial weights matrixes: a traditional symmetric geographical distance weight matrix and a novel asymmetric mixed geography-economy weight matrix.The results consistently show that the natural resource boom harms the development of both local and neighboring manufacturing sectors within China,suggesting that the regional DDE exists at China’s provincial level.This paper also finds that the DDE is mainly caused by the energy sector boom and is not evident in both metallic and non-metallic mineral sectors.Both eastern China and central China show a significantly negative direct effect and an insignificant indirect effect of the natural resource boom,while both the direct and indirect effects of natural resource boom are evident in western China.Moreover,the natural resource boom induces labor and capital mobility from manufacturing to mining in both local and neighboring regions,and thus hindering the development of manufacturing.This paper next identifies whether the resource taxation reform impacts the regional DDE,using the Difference-in-Difference-in-Differences（DDD）model and based on the policy shock of the oil and natural gas taxation reform in 2010.The empirical results show that the resource taxation reform in China has a positive effect on the development of manufacturing in resource-based provinces,which implying the resource taxation reform by imposing the ad valorem tax could mitigate or avoid the regional DDE.Specifically,after the reform,the output value of manufacturing increases in resource-abundant provinces and the ratio of mining output value to manufacturing output also decreases.A series of robustness tests,including DDD model with continuous treatment variable,IV method,and different time periods of samples,obtain a consistent result.Besides,considering the invalidity of the Stable Unit Treatment Value Assumption caused by the spillover effects of policy shock,this paper uses a spatial DDD model to analyze the spatial treatment effect of the resource taxation reform.The results suggest there is no spatial treatment effect of the reform.In other words,the positive effect of resource taxation reform on the manufacturing development does not spread beyond provinces that performed this reform.In line with the theoretical propositions,this paper uses the mediation effect model to examine the two mechanisms revealing how the resource taxation reform impacts the regional DDE.First,this paper performs the IV regression to examine the fiscal revenue effect.Based on the data availability,the regression analyses are based on a dataset of 30 provinces during 1994-2016.The results reveal that the fiscal revenue effect is significantly obvious and the reform greatly increases the fiscal revenue in resource-based regions.And then local governments can increase the supply of public goods as the rise in fiscal revenue,and thus mitigating the regional DDE.The logic behind this is that local governments will invest more in education and infrastructure construction,conditional on the numerous fiscal revenues generated by the resource taxation reform.This increasing supply of public goods facilitates the accumulation of human capital as well as technology innovation especially in the manufacturing sector.Consequently,these benefits foster the manufacturing sector,and the resource-based regions achieve a sustainable development.This paper further investigates the TFP growth effect,using the data from Annual Survey of Industrial Firms（ASIF）during 1998-2013.This paper matches the production information in the ASIF database with other economic variables at the city-level through the reported city address of each firm,and finally constructs a panel data with the information on year-city-industry-firm.Particularly,this paper first uses two methods,Levinsohn-Petrin（LP）method proposed by Levinsohn and Petrin（2003）and linear generalised method of moments（GMM）proposed by Blundell and Bond（1998）,to calculate the TFP in the manufacturing sector,and then uses two models,DDD and PSM-DDD（i.e.,DDD method based on Propensity Score Matching method）,to perform empirical tests.The regression results show that the resource taxation reform has a positive effect on the TFP growth in manufacturing.After the reform,the aggregate output value as well as the TFP of manufacturing firms increases a lot in resource-abundant cities.In addition,the results of heterogenous analyses imply the reform not only benefit the output of the manufacturing but also increase the manufacturing TFP in three types of cities（except for the grow-up cities）: growing,recessionary,regenerative cities.Besides,the reform also boosts the output and the TFP of manufacturing firms featured as labor-intensive,capital-intensive,and technology-intensive among these resource-abundant cities.Finally,after the reform,the output and the TFP in non-state-owned firms increase more than that in state-owned firms.Finally,this paper provides some policy implications for the resource-based regions to mitigate or avoid the regional DDE and achieve sustainable development.First,the local governments should promote the regional innovation and develop the technology-intensive resource industries.Second,some important policy instructions should be combined with the fiscal support to achieve the connectivity of production technologies and the multiple industrial linkages between the resource sector and the manufacturing sector.It is helpful to form a virtuous cycle in a combination of resource endowment and economic development.Third,the local industries should take actively part in the regional industry redistribution and the local governments should make a joint effort to avoid the Dutch disease.Fourth,governments should efficiently utilize the tax revenues to improve the supply and the quality of public services.Finally,it is also important for governments to be cautious of the fiscal revenue curse and improve the institutional design for the taxation management and the distribution of revenue. |
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