Do Energy Resource Curse and Heterogeneous Curse Exist in Provinces? Evidence from China

Abstract

This study aims to find the relationship between energy resource dependence and economic growth in consideration of interprovincial heterogeneity. This paper first uses panel data from 14 provinces with rich energy resources in China between 2001 and 2016 as a whole to test the energy resource curse hypothesis. It finds that there is no obvious resource curse from a general perspective. It further makes time prediction and transmission channel analysis based on regressions of each province and classifies them into four groups according to the different degrees of the resource curse. It shows the different roles of resource dependencies in different groups. Twelve provinces are subject to different degrees of the resource curse, among which, six provinces would eventually experience negative economic growth if they increase the degree of resource dependence. Next, this study discusses the mechanism of one particular group, “invisible energy resource curse”, which is when energy resources directly promote but indirectly hinder economic growth. Finally, based on the results, the present study offers policy suggestions according to provinces’ heterogeneous curse levels.