Energy exploitation and economic growth in Western China: An empirical analysis based on the resource curse hypothesis

Abstract

Based on resource curse hypothesis, this paper carries out an econometric analysis on the relationship and its transmission mechanism between energy exploitation and economic growth with cross-province panel data over 1991–2006. Results reveal that there is the significantly negative correlation between energy exploitation and economic growth, which indicates since the 1990s, the resource curse effect from energy exploitation has appeared evidently; though, before the implementation of the Western development strategy, energy exploitation acted negatively on opening degree, S&T innovation and human capital input, the effect was yet uncreated. However, after the implementation of the strategy, the effect emerged evidently as a result of the enhanced negative effect of energy exploitation on S&T innovation and human capital input. Moreover, further tests indicate that energy exploitation impeded economic growth mainly through three indirect transmission channels: The crowding-out effect towards human capital input and S&T innovation, and the weakening of institution aroused by rent-seeking and corruption. And among them, human capital input is the strongest transmission factor.

Keywords

energy exploitation / economic growth / resource curse / transmission mechanism

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2014 Higher Education Press and Brill