Research on Resource Curse Effect of Resource-Dependent Cities: Case Study of Qingyang, Jinchang and Baiyin in China

Chenyu Lu, Dai Wang, Peng Meng, Jiaqi Yang, Min Pang and Li Wang
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Chenyu Lu: College of Geography and Environmental Science, Northwest Normal University, Lanzhou 730070, China
Dai Wang: College of Geography and Environmental Science, Northwest Normal University, Lanzhou 730070, China
Peng Meng: College of Geography and Environmental Science, Northwest Normal University, Lanzhou 730070, China
Jiaqi Yang: College of Geography and Environmental Science, Northwest Normal University, Lanzhou 730070, China
Min Pang: College of Geography and Environmental Science, Northwest Normal University, Lanzhou 730070, China
Li Wang: School of Economics and Management, Lanzhou Jiaotong University, Lanzhou 730070, China

Sustainability, 2018, vol. 11, issue 1, 1-21

Abstract: For a specific small-scale region with abundant resources, its copious resources tend to dictate the basic direction of its development, and may subsequently give rise to an industrial structure centered on the advantageous resources. This can give rise to an economic structure that lacks diversity, causing the economic development in the entire local region to fall into the dilemma of the resource curse. The present study conducts a case study from the perspective of small-scale regions, incorporating various types of resource-dependent cities in China, including Qingyang, Jinchang, and Baiyin, to interpret and analyze the resource curse effect by calculating a resource curse coefficient. Moreover, based on the regression model, the present study further discusses the empirical relations associated with the resource curse phenomenon. The results show that, regardless of whether a resource-dependent city is in the early, intermediate or late stage of its resource development, economic development is always plagued by the resource curse effect to a certain degree. Resource development cannot promote economic development, rather, it inhibits economic growth to some extent, resulting in an array of effects that are unfavorable to economic development, rendering the development unsustainable. For different types of resource-dependent cities, resource curse effect exhibits distinct characteristics. The resource curse effect is strongest for a resource-dependent city during an economic recession, is less severe during a development period, and is weakest during maturation. Resource development not only has a direct adverse impact on economic growth, but also often affects economic growth in multiple ways and on various levels through the Dutch disease effect, the crowding out effect, and the institution weakening effect. Until now, most results show that there is no obvious resource curse effect at the national and provincial level. The verification results of small-scale regions show that the resource curse effect at the city level still exists. In addition, the resource curse effect differs across different types of resource-dependent cities.

Keywords: resource curse; economic growth; resource-dependent city; China (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
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