IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v15y2022i16p5853-d886508.html
   My bibliography  Save this article

Assessing the Contribution of Natural Gas Exploitation to the Local Economic Growth in China

Author

Listed:
  • Cheng Peng

    (School of Economics and Management, Southwest University of Science and Technology, Mianyang 621010, China)

  • Dianzhuang Feng

    (School of Economics and Management, Southwest University of Science and Technology, Mianyang 621010, China)

  • Hai Long

    (Business School, Wuchang University of Technology, Wuhan 430223, China)

Abstract

This study investigates whether natural gas exploitation is a blessing or a curse for provincial and prefecture economic growth. This study employs regression models and synthetic control methods (SCM) to investigate the research question based on hybrid panel and time-series data from 1993 to 2015 from 14 prefecture cities in Sichuan province in China. Based on the provincial data of Sichuan, the regression results show that natural gas exploitation is a curse for the provincial economic development of Sichuan because of the negative associations between gas resources and economic performance, for which the increasing rent-seeking in the province may partially account. However, the SCM results find that the local economy of Dazhou city may benefit from its sufficient natural gas resources in the short run, but it is not sustainable. Meanwhile, the gas resource has no significant contributions to the regional economic growth of Sichuan overall, which is partially attributed to the fact that resource exploitation has no significant spillover effects on some sustainable contributors, such as education, innovation, and others. The practical implication for the economic governors is that the resource-consumed economic route is not sustainable, although it may drive local economic growth in the short run.

Suggested Citation

  • Cheng Peng & Dianzhuang Feng & Hai Long, 2022. "Assessing the Contribution of Natural Gas Exploitation to the Local Economic Growth in China," Energies, MDPI, vol. 15(16), pages 1-17, August.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:16:p:5853-:d:886508
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/15/16/5853/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/15/16/5853/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fleming, David A. & Measham, Thomas G. & Paredes, Dusan, 2015. "Understanding the resource curse (or blessing) across national and regional scales: Theory, empirical challenges and an application," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(4), October.
    2. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    3. Joshua D. Angrist & Adriana D. Kugler, 2008. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 191-215, May.
    4. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    5. Havranek, Tomas & Horvath, Roman & Zeynalov, Ayaz, 2016. "Natural Resources and Economic Growth: A Meta-Analysis," World Development, Elsevier, vol. 88(C), pages 134-151.
    6. Fan, Rui & Fang, Ying & Park, Sung Y., 2012. "Resource abundance and economic growth in China," China Economic Review, Elsevier, vol. 23(3), pages 704-719.
    7. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    8. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    9. Bardini, Carlo, 1997. "Without Coal in the Age of Steam: A Factor-Endowment Explanation of the Italian Industrial Lag Before World War I," The Journal of Economic History, Cambridge University Press, vol. 57(3), pages 633-653, September.
    10. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    11. Sachs, Jeffrey D. & Warner, Andrew M., 1999. "The big push, natural resource booms and growth," Journal of Development Economics, Elsevier, vol. 59(1), pages 43-76, June.
    12. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
    13. Blanco, Luisa & Grier, Robin, 2012. "Natural resource dependence and the accumulation of physical and human capital in Latin America," Resources Policy, Elsevier, vol. 37(3), pages 281-295.
    14. Robinson, James A. & Torvik, Ragnar & Verdier, Thierry, 2014. "Political foundations of the resource curse: A simplification and a comment," Journal of Development Economics, Elsevier, vol. 106(C), pages 194-198.
    15. Maty Konte, 2013. "A curse or a blessing? Natural resources in a multiple growth regimes analysis," Applied Economics, Taylor & Francis Journals, vol. 45(26), pages 3760-3769, September.
    16. Anne D. Boschini & Jan Pettersson & Jesper Roine, 2007. "Resource Curse or Not: A Question of Appropriability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(3), pages 593-617, September.
    17. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-380, November.
    18. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    19. Jin Guo & Xinye Zheng & Feng Song, 2016. "The Resource Curse and Its Transmission Channels: An Empirical Investigation of Chinese Cities’ Panel Data," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(6), pages 1325-1334, June.
    20. Satti, Saqlain Latif & Farooq, Abdul & Loganathan, Nanthakumar & Shahbaz, Muhammad, 2014. "Empirical evidence on the resource curse hypothesis in oil abundant economy," Economic Modelling, Elsevier, vol. 42(C), pages 421-429.
    21. Auty, R. & Warhurst, A., 1993. "Sustainable development in mineral exporting economies," Resources Policy, Elsevier, vol. 19(1), pages 14-29, March.
    22. Stevens, Paul & Dietsche, Evelyn, 2008. "Resource curse: An analysis of causes, experiences and possible ways forward," Energy Policy, Elsevier, vol. 36(1), pages 56-65, January.
    23. Sachs, Jeffrey D & Warner, Andrew M, 1997. "Fundamental Sources of Long-Run Growth," American Economic Review, American Economic Association, vol. 87(2), pages 184-188, May.
    24. repec:hal:pseose:halshs-00979099 is not listed on IDEAS
    25. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    26. Yao, Xilong & Wang, Hualing & Shao, Shuai & Li, Xiaoyu & Guo, Zhi, 2022. "“Booster” or “obstacle”: Can coal capacity cut policies moderate the resource curse effect? Evidence from Shanxi (China)," Resources Policy, Elsevier, vol. 75(C).
    27. Jonathan Isham & Michael Woolcock & Lant Pritchett & Gwen Busby, 2005. "The Varieties of Resource Experience: Natural Resource Export Structures and the Political Economy of Economic Growth," The World Bank Economic Review, World Bank, vol. 19(2), pages 141-174.
    28. Doraisami, Anita, 2015. "Has Malaysia really escaped the resource curse? A closer look at the political economy of oil revenue management and expenditures," Resources Policy, Elsevier, vol. 45(C), pages 98-108.
    29. repec:hoo:wpaper:e-92-3 is not listed on IDEAS
    30. Asea, Patrick K. & Lahiri, Amartya, 1999. "The precious bane," Journal of Economic Dynamics and Control, Elsevier, vol. 23(5-6), pages 823-849, April.
    31. Tang, Chang & Irfan, Muhammad & Razzaq, Asif & Dagar, Vishal, 2022. "Natural resources and financial development: Role of business regulations in testing the resource-curse hypothesis in ASEAN countries," Resources Policy, Elsevier, vol. 76(C).
    32. Shisong Cao & Deyong Hu & Wenji Zhao & You Mo & Shanshan Chen, 2017. "Monitoring Spatial Patterns and Changes of Ecology, Production, and Living Land in Chinese Urban Agglomerations: 35 Years after Reform and Opening Up, Where, How and Why?," Sustainability, MDPI, vol. 9(5), pages 1-18, May.
    33. Yuxiang, Karl & Chen, Zhongchang, 2011. "Resource abundance and financial development: Evidence from China," Resources Policy, Elsevier, vol. 36(1), pages 72-79, March.
    34. Chun-Ping Chang & Yu Hao, 2017. "Environmental performance, corruption and economic growth: global evidence using a new data set," Applied Economics, Taylor & Francis Journals, vol. 49(5), pages 498-514, January.
    35. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
    36. Fischer, Alexandra Paige, 2018. "Pathways of adaptation to external stressors in coastal natural-resource-dependent communities: Implications for climate change," World Development, Elsevier, vol. 108(C), pages 235-248.
    37. Wright, Gavin, 1990. "The Origins of American Industrial Success, 1879-1940," American Economic Review, American Economic Association, vol. 80(4), pages 651-668, September.
    38. Yaobin Liu, 2013. "Energy Production and Regional Economic Growth in China: A More Comprehensive Analysis Using a Panel Model," Energies, MDPI, vol. 6(3), pages 1-12, March.
    39. Papyrakis, Elissaios & Gerlagh, Reyer, 2007. "Resource abundance and economic growth in the United States," European Economic Review, Elsevier, vol. 51(4), pages 1011-1039, May.
    40. Taotao Deng & Mulan Ma & Jianhua Cao, 2014. "Tourism Resource Development and Long-Term Economic Growth: A Resource Curse Hypothesis Approach," Tourism Economics, , vol. 20(5), pages 923-938, October.
    41. Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Zhiguo & Gao, Wei & Zafar, Quratulain & Dördüncü, Hazar, 2023. "Natural resources extraction and geopolitical risk: Examining oil resources extraction in China," Resources Policy, Elsevier, vol. 85(PA).
    2. Wenbin Cai & Huiren Zhang & Zhimin Huang & Xiangyang Mo & Kang Zhang & Shun Liu, 2023. "Development and Analysis of Mathematical Plunger Lift Models of the Low-Permeability Sulige Gas Field," Energies, MDPI, vol. 16(3), pages 1-12, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hui Hu & Weijun Ran & Yuchen Wei & Xiang Li, 2020. "Do Energy Resource Curse and Heterogeneous Curse Exist in Provinces? Evidence from China," Energies, MDPI, vol. 13(17), pages 1-26, August.
    2. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).
    3. Lotfalipour, Mohammad Reza & sargolzaie, Ali & Salehnia, Narges, 2022. "Natural resources: A curse on welfare?," Resources Policy, Elsevier, vol. 79(C).
    4. Ruba A. Aljarallah & Andrew Angus, 2020. "Dilemma of Natural Resource Abundance: A Case Study of Kuwait," SAGE Open, , vol. 10(1), pages 21582440198, January.
    5. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Clark, Jeremy, 2017. "The evolution of the natural resource curse thesis: A critical literature survey," Resources Policy, Elsevier, vol. 51(C), pages 123-134.
    6. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    7. Chandan Sharma & Debdatta Pal, 2021. "Revisiting resource curse puzzle: new evidence from heterogeneous panel analysis," Applied Economics, Taylor & Francis Journals, vol. 53(8), pages 897-912, February.
    8. Yilanci, Veli & Aslan, Murat & Ozgur, Onder, 2021. "Disaggregated analysis of the curse of natural resources in most natural resource-abundant countries," Resources Policy, Elsevier, vol. 71(C).
    9. Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Smyth, Russell, 2016. "Oil curse and finance–growth nexus in Malaysia: The role of investment," Energy Economics, Elsevier, vol. 57(C), pages 154-165.
    10. Chandan Sharma & Ritesh Kumar Mishra, 2022. "On the Good and Bad of Natural Resource, Corruption, and Economic Growth Nexus," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 889-922, August.
    11. Cheng, Zhonghua & Li, Lianshui & Liu, Jun, 2020. "Natural resource abundance, resource industry dependence and economic green growth in China," Resources Policy, Elsevier, vol. 68(C).
    12. Abdul HANNAN* & Hasan M. MOHSIN**, 2015. "Regional Analysis of Resource Curse Hypothesis: Evidence from Panel Data," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 25(1), pages 45-66.
    13. Nicoletta Corrocher & Camilla Lenzi & Marie-Louise Deshaires, 2020. "The curse of natural resources: an empirical analysis of European regions," Regional Studies, Taylor & Francis Journals, vol. 54(12), pages 1694-1708, December.
    14. Ozcan, Burcu & Temiz, Mehmet & Gültekin Tarla, Esma, 2023. "The resource curse phenomenon in the case of precious metals: A panel evidence from top 19 exporting countries," Resources Policy, Elsevier, vol. 81(C).
    15. Ben-Salha, Ousama & Dachraoui, Hajer & Sebri, Maamar, 2021. "Natural resource rents and economic growth in the top resource-abundant countries: A PMG estimation," Resources Policy, Elsevier, vol. 74(C).
    16. Pérez, Claudia & Claveria, Oscar, 2020. "Natural resources and human development: Evidence from mineral-dependent African countries using exploratory graphical analysis," Resources Policy, Elsevier, vol. 65(C).
    17. Wu, Sanmang & Lei, Yalin, 2016. "Study on the mechanism of energy abundance and its effect on sustainable growth in regional economies: A case study in China," Resources Policy, Elsevier, vol. 47(C), pages 1-8.
    18. Fan, Rui & Fang, Ying & Park, Sung Y., 2012. "Resource abundance and economic growth in China," China Economic Review, Elsevier, vol. 23(3), pages 704-719.
    19. Boire, Sidiki & Nell, Kevin S., 2021. "The enclave hypothesis and Dutch disease effect: A critical appraisal of Mali's gold mining industry," Resources Policy, Elsevier, vol. 74(C).
    20. Ali, Adnan & Ramakrishnan, Suresh & Faisal,, 2022. "Financial development and natural resources. Is there a stock market resource curse?," Resources Policy, Elsevier, vol. 75(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:15:y:2022:i:16:p:5853-:d:886508. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.