A Study On Resource Curse And Regional Economic Growth

As one of basic factors of production for economic development, natural resources play an important role in regional economic development. From a global perspective, some of the economic power countries, for example the United States, Canada, Australia, New Zealand, Norway and so on, convert natural resources into productivity through strong profitability industry chain and promote the prosperity of the national economy.While for some resource-rich countries,for example Latin America, Venezuela, Ecuador, Africa, Zambia, Congo, Asia, Iraq, Kuwait, their rich natural resources do not lay the foundation for sustained economic growth. Instead,their rich natural resources did not become a major force in promoting economic growth, but there was suppression of economic growth, say the so-called "resource curse." phenomenon.Though our country is rich in natural resources, it shows low per ca pita and uneven distribution characteristics. Meanwhile, in the process of economic development, due to specific historical conditions and opportunities, national resources are more inclined to focus on the eastern coastal regions, while western regions which their resources are relatively abundant export large number of natural resources and are lack of economic growth momentum. From an intuitive point of view, it shows that development of natural resources-rich Midwest area of China has lagged behind the development of the eastern region of eastern China whose natural resources are relatively scarce, thus "resource curse" proposition in our province-level domain is established.Against this background, this paper employs mainland China 30 provinces except Tibet’s, municipalities and autonomous regions’ panel data from year 1997 to 2012 as the empirical object and attempts to summarize sort Natural Resources and Economic Growth theories of the main contributors under framework of endogenous growth theory, and strive to make more in-depth understanding of the impact of natural resources on economic growth, whether it is the "gospel" or "curse" ?By using Feasible Generalized Least Squares which can solve the auto-correlation problem to estimate the influence of various factors on natural resources and economic growth, this paper tests the relationship between natural resources and economic growth at the national level and regional level through empirical methods.If natural resources have a negative impact on economic growth, then what are the main transmission mechanism? How does this work? And this paper discusses the reasons for the "resource curse" phenomena whether it is because resource rich or resource-dependent? On this basis, by referring to Hansen threshold model, this paper build the threshold regression model to test whether main factors that influence the relationship between natural resources and economic growth exist and detects trends of each factor after adding threshold dummies? Finally, by combining relative theories of Spatial Economics and the whole field of spatial autocorrelation analysis, this paper tests whether there is spatial dependence of the variables in the geographical space; Then this paper builds spatial lag model(Spatial Lag Model, SLM), spatial error model(Spatial Error Model, SEM) and spatial Durbin model(Spatial Durbin Model, SDM) to probe reasons of regional economic differences under different natural resources and to decompose spatial effects of each factor so as to understand the direct effects,indirect effects and total effects of different variables on regional economic development.Findings show that: ①Abundant natural resources will not hinder the development of the regional economy, regional economy’ key "resource curse" is resource dependency; ②Institutional quality, technology investment, accumulation of human capital, and the level of opening has a threshold effect toward "resource curse " phenomenon. When institutional quality, technology investment, human capital accumulation and opening levels were higher than the threshold value 8.63,0.0176,9.8080,1.1653 they can effectively improve the relationship between resources and economic growth and promote regional economic development; ③The natural resource and labor intensive sector and low-tech features make technology investment, human capital accumulation and openness the main factors for natural resources to hinder China’s economic growth. In the short term, the phenomenon that resource-industry bring higher income make people become short-sighted and neglect investment in technology development and education. In the long run, it will definitely affect the resource-based economic growth and leads to the phenomenon that abundant natural resources fail to benefit economic development and instead make the economy backsliding; ④The level of economic development of China and the dependence on resources are not random, but exhibit spatial clustering province domain; ⑤whether spatial lag model(SLM), spatial error model(SEM) or spatial Durbin model(SDM) show that abundant resource will significantly promote the region’s economic growth and the higher the regional resource dependence the higher inhibitory effect it on economic growth.And with the improve of level of neighborhood areas resource dependence,it will not only inhibits the growth of the regional economy, and would spill over to the surrounding area, affecting the surrounding region’s economic growth; ⑥Among factors that influence economic growth,there presents overflow and competition two different effects. The institutional quality, open level and physical capital investment levels have significant spillover effects, while the proportion of investment in technology, human capital accumulation and the manufacturing sector have significant competitive benefits; ⑦Irrational industrial structure, will not only inhibits the growth of the regional economy,but also will have a negative effect onsurrounding areas’ economic growth.Finally, aimed at the problems analyzed and findings, this paper makes relevant policy recommendations, such as increase the technical innovation and pay attention to the development of human capital, adjusting the industrial structure and to establish a relatively fair and reasonable institutional guarantee and other relevant policy recommendations. The study also points out the existing problems and future research directions.