Abstract
This paper analyzes the “resource curse” and “financial threshold effect” that may exist in China and then uses the data from 30 provinces from 2004 to 2018 as research samples. We used linear regression and nondynamic panel threshold models to analyze the financial threshold effects of the “resource curse” hypothesis and the “resource curse” phenomenon. At the same time, we divided the level of financial development to verify the robustness of the research conclusions in this paper. The study found the following: (1) There is a certain correlation between the abundance of resources and economic growth. Whether this can be seen as a “curse” or a “blessing” of resources is significantly related to the degree of financial development. (2) Whether financial development can alleviate the “resource curse” depends on the degree of financial development. In the extremely scarce stage of financial resources, the resource endowment effect is obvious, and the level of economic development in resource-based regions will be higher than in other regions; when the level of financial development is low (financial resources are not scarce and have not reached a reasonable level), the phenomenon of the “resource curse” appears; when the level of financial development is highly developed, economic development benefits more from financial development, and the effects of resource endowment decline. Only when financial development is at a reasonable level can resource endowments effectively raise the level of economic development.
Highlights
Resource-oriented traditional economic growth theory holds that resource endowment is necessary for economic growth
Empirical Results Analysis. e paper examines the impact of the level of financial development on the relationship between natural resources and the real economy, verifies whether there is an impact, and conducts an empirical analysis of its impact path
Aiming at the “resource curse” hypothesis, this article first derived the “resource curse” and “financial threshold effect” that may exist in China. en, using data from 30 provinces from 2004 to 2018 as a research sample, linear regression and the non-dynamic panel threshold model were used to analyze the financial threshold effect in terms of the “resource curse” hypothesis
Summary
Resource-oriented traditional economic growth theory holds that resource endowment is necessary for economic growth. Subsequent development practices have run counter to this, and countries and regions rich in resources often perform poorly. Whether it is Spain, Russia, or oil-rich countries such as Nigeria and Venezuela, these countries have encountered development obstacles to varying degrees. Switzerland, Japan, Hong Kong, Taiwan, South Korea, Singapore, and other countries in the same period of time, under the condition of relatively scarce resources, are developing at a higher speed. After the 1950s, there was a lot of discussion about the negative correlation between natural resources and economic growth. Auty [3] first proposed the “resource curse” proposition and summarized the negative correlation between resource abundance and economic growth as the “resource curse” effect and pointed out the development difficulties of resource-based economies
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