Is financial development hampering or improving the resource curse? New evidence from China

Rongwei, Xie; Zhai, Xiaoying

doi:10.1016/j.resourpol.2020.101676

Cited by 47 publications

(21 citation statements)

References 11 publications

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“…We exclude North Kalimantan, a new province in Indonesia because of data scarcity issue. The variables used in this research are adapted from Rongwei and Xiaoying (2020). The dependent variable is per capita economic growth measured by the difference value of the natural logarithm of real Gross Regional Domestic Product (GRDP) at periods t and t-1.…”

Section: Methodsmentioning

confidence: 99%

“…Moradbeigi and Law (2017) found that interaction between financial development and natural resource abundance (proxied by oil rent) had a positive association with economic growth, which means could curb the natural resource curse. Rongwei and Xiaoying (2020) used panel data of 30 provinces in China from 2005 to 2018 to test the role of financial development on natural resource abundance and economic growth relationship and found that financial development could mitigate the curse in China.…”

Section: Introductionmentioning

confidence: 99%

“…In that condition, strengthening financial development can have a critical role in curbing the curse. According to Rongwei and Xiaoying (2020), the financial system is able to establish a fund for controlling natural resource revenue, maintaining a reasonable level of resource revenue, and retrieving resource revenue higher than the average level of the fund. Therefore, it can effectively avoid economic fluctuations caused by market instability of resource revenue.…”

Section: Introductionmentioning

confidence: 99%

“…In specific, this study is motivated by the two most relevant analyses conducted by Hilmawan and Clark (2019), and Rongwei and Xiaoying (2020). The first considers with weak robustness checks by implementing three different empirical techniques but not taking into account the role of financial development on their analysis, whereas the latter considers endogeneity issues by implementing a more flexible econometric model but not bearing in mind the robustness checks by employing different indicators for natural resources and financial development, for example.…”

Section: Introductionmentioning

confidence: 99%

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Testing the Existence of Natural Resource Curse in Indonesia: The Role of Financial Development

Ridena

Nurarifin

Hermawan

et al. 2021

JESP

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Natural resources may become a blessing that can contribute to societies’ welfare increases. Yet natural resource abundance could also become a curse for countries’ economic development. Numerous studies have investigated the relationship between natural resources and economic performance. However, the results remain ambiguous and have no consensus in the literature. In specific, most literature focused only on testing the curse’s existence, while studies that involve the role of financial development in mediating the nexus remain scarce. To the best of our knowledge, this is a pioneer study in a developing country endowed by natural resources. Using panel data of 33 provinces from 2012 to 2018, this study implements the Generalized Method of Moments (GMM) technique to examine the existence of the natural resource curse and scrutinize the role of financial development in mitigating the curse. Results show that Indonesia potentially experiences a natural resource curse. Nonetheless, the negative effect of natural resources on economic growth could be mitigated by enhancing the role of financial development to reach a certain threshold over economic output. This study recommends policymakers to not only increase financial development across the provinces but also pay more serious attention to other factors causing the natural resource curse in Indonesia.

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Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Testing the Existence of Natural Resource Curse in Indonesia: The Role of Financial Development

Ridena

Nurarifin

Hermawan

et al. 2021

JESP

View full text Add to dashboard Cite

show abstract

“…The first was that there was a "resource curse". Some researchers [14][15][16][17] found a significant negative correlation between natural resource dependence (oil abundance) and economic growth through empirical tests. Sadik-Zada and Loewenstein found rapacious rent seeking in oil-rich countries, which is prone to resource curses, but well-functioning democratic institutions can prevent this from happening [18].…”

Section: Resource Dependence and High-quality Economic Developmentmentioning

confidence: 99%

What Is the Mechanism of Resource Dependence and High-Quality Economic Development? An Empirical Test from China

Zhang

2020

Sustainability

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For a long time, the resource curse had been widely concerned by researchers all over the world, especially in China. At present, China is in the transition stage from high-speed economic growth to high-quality development, and innovation and talents are important drivers. However, the existing research lacked an empirical test on resource curse and its transmission mechanism at the provincial level in China at this stage. In order to test the mechanism of transformation and upgrading of resource-based regions in the period of high-quality economic development, this study used the panel data of 30 provincial administrative regions of Chinese mainland (not including Tibet) from 2007 to 2017 to build a multi-step, multi-mediation model, and explored the direct and indirect impact mechanism of resource dependence on the high-quality economic development using the bootstrap method and generalized least square method. The key findings of this study were as follows: (1) The high-quality economic development level in the central and western provinces of China had been in a backward position compared with the eastern provinces. (2) There was a “resource curse” in the stage of high-quality economic development at the provincial level in China. (3) In terms of transmission mechanism, resource dependence had a negative impact on the high-quality economic development through the crowding-out effect of innovation investment and talents. Our conclusion provides a theoretical reference for other countries and regions to explore the relationship between resource dependence and high-quality economic development and may inform the economic development strategies by policymakers that wish to transform and upgrade the resource-based regional economy.

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Price Fluctuation of Natural Resources and Its Impacts on Economic Development

Song,

Ding,

Chen

2023

Contributions to Public Administration and Public Policy

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Is financial development hampering or improving the resource curse? New evidence from China

Cited by 47 publications

References 11 publications

Testing the Existence of Natural Resource Curse in Indonesia: The Role of Financial Development

Testing the Existence of Natural Resource Curse in Indonesia: The Role of Financial Development

What Is the Mechanism of Resource Dependence and High-Quality Economic Development? An Empirical Test from China

Price Fluctuation of Natural Resources and Its Impacts on Economic Development

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