Curse Effect Research Articles

Does rubber expansion hinder the migration of rural labor? Evidence from southwest China?

AbstractThe expansion of agroforestry crops in South Asia has resulted in the reallocation of local agricultural resources, including labor force. Based on two‐wave panel data collected from more than 600 smallholder rubber farmers in southwest China, this study examines the impacts of rubber expansion on the migration of rural labor. The results show that smallholders planting more rubber plantations have significantly fewer migrant family members and lower likelihood of migration, revealing a significantly negative effect of rubber cultivation on the migration of rural labor. Given that the migration of rural labor is a major trend in rural economic transformation, rubber farming appears to result in the resource curse in rubber planting areas. In addition, a positive interaction effect between rubber cultivation and the price of natural rubber on the migration of rural labor reveals that the resource curse effect of natural rubber decreases with the decrease in the price of natural rubber. A period with a relatively low price of natural rubber provides an opportunity to foster the migration of rural labor in rubber planting areas.

“Booster” or “obstacle”: Can coal capacity cut policies moderate the resource curse effect? Evidence from Shanxi (China)

China’s recent coal capacity cut policies are expected to promote an energy supply-side revolution. However, their real impacts are still uncertain, especially for coal resource-based regions. Based on a dynamic computable general equilibrium (DCGE) model, this is the first study to investigate the effects of output-controlled and investment-controlled coal capacity cut policies on macroeconomy and the environment (including carbon emissions) in Shanxi province, the most typical representative of coal resource-based regions in China. The results show that the output-controlled coal capacity cut policy not only can reduce sulfur emissions and carbon emissions, but also can promote long-term economic growth and households’ income. Moreover, although the output-controlled coal capacity cut policy reduces financial revenues, this kind of policy can weaken the excessive inflow of production factors in coal industry and promote the development of non-coal industries. On the other hand, the investment-controlled coal capacity cut policy does not cause labor outflow from coal industry. This kind of policy can also reduce sulfur emissions and carbon emissions, though it shows a negative impact on macroeconomic factors, such as gross domestic product and welfare. We find that only the output-controlled coal capacity cut policy can effectively moderate the resource curse effect in coal resource-based regions, and therefore, this kind of policy should be the first choice of the Chinese government.

New oil discoveries in Guyana since 2015: Resource curse or resource blessing

In May 2015, ExxonMobil announced the discovery of significant amounts of oil offshore Guyana. It has been argued that these new oil discoveries could boost Guyana's gross domestic product significantly. However, the discovery is not exclusively positive news – it demands some caution. We apply a contemporary understanding of oil curse effects to economic and political facets of Guyana and establish a set of conditions through which Guyana will be able to realise the potential of its resource wealth. Among these conditions are the development of women's involvement in the economy and in politics; and that oil wealth is properly reinvested and competitivity in other export sectors is maintained.

Does power grid infrastructure stimulate regional economic growth?

What are the effects of power grid infrastructure investment on the regional economy, and what explains these effects? This paper uses the restricted profit model and a seemingly unrelated regression (SUR) to estimate the short-term and long-term effects of power grid infrastructure on regional economic growth in 30 provinces in China from 1998 to 2017. Our results show that (1) power grid infrastructure investment has a significant positive effect on regional economic growth; (2) the associated long-term impact on the economy is greater than the short-term impact; (3) regions with high energy demands and good industry fundation benefit more from power grid infrastructure in the long term; (4) the output elasticity of power-importing and balancing regions maintained an upward trend after an electricity shortage problem had been solved, while the elasticity in power-exporting regions was positive but steadily decreased because of the resource curse effect. This paper suggests that in the current stage, the power grid infrastructure is a good policy tool to drive regional economies. However, there are differences in investment priorities among different regions.

Are natural resources a blessing or a curse for economic development? The importance of energy innovations

Based on China's provincial panel data from 2007 to 2019, this paper proposes the importance of energy innovation, uses the system GMM model to verify the impact of energy innovation on the resource curse effect, and supplements and improves the existing research. This study made the following findings: (1) The “resource curse” hypothesis exists in China. (2) Without considering other factors, natural resources and economic development are positively correlated, with a coefficient of 0.1872. (3) When the technology level variable is added, the coefficient of the natural resource variable drops to −0.1403. Due to the crowding-out effect, natural resources hinder economic development. (4) When the human capital variable is added, the natural resource coefficient is −0.2492. The “resource curse” is realized by crowding out the total amount of human capital accumulation. (5) When the material capital input variable is added, the coefficient of the natural resource variable is −0.163, but the absolute value drops significantly, indicating that the “resource curse” effect is alleviated. (6) When the energy innovation variable is added, the coefficient is 0.1401, and the coefficient of the natural resource variable is −0.1022, while the absolute value drops significantly, indicating that energy innovation largely alleviates the “resource curse” effect.

Curse or blessing: how does natural resource dependence affect city‐level economic development in China?

Based on the ‘resource curse’ theory, this study uses panel data for 256 prefecture‐level cities in China from 2003 to 2016 to test the relationship and mechanism between natural resource dependence and economic development. The panel model and instrumental variable regression results show that natural resources generally promote economic development, but for 109 resource‐based cities, the influence of natural resources on economic development seems quite different. The panel threshold model shows that in the resource‐based cities, (i) resources have a ‘blessing effect’ on economic development during economic prosperity (GDP growth rate is greater than 12.1 per cent); (ii) the relationship is not statistically significant when the GDP growth rate is between 5 per cent and 12.1 per cent; and (iii) when the GDP growth rate is lower than 5 per cent, natural resources have a ‘curse effect’ on economic development. Furthermore, the results of the mediation effect model show that the mediation effect of industrial diversification on the relationship between resource dependence and economic development suppresses the promotion of natural resource on economy. An excessive concentration of resource industries has a crowding‐out effect on non‐resource industries in resource‐based cities, which reduces the level of industrial diversification and is not conducive to economic development.

Resource Curse: Experience Study on Economic Development of Petroleum Countries

This paper studies the causes of “resource curse” from the perspective of “national utilization of petroleum resources” and uses the samples of eight typical oil resource-rich countries to study their national economic growth status. Empirical studies show that the resource curse effect of most countries is caused by “Dutch disease". Relying too much on the development of the oil resources industry, with the unreasonable industrial structure, the excessive export of oil resources, and the “extrusion effect” of production factors are the reasons that delay the technological innovation and development of the industry and inhibit the balanced development of other industries.

The regional Dutch disease effect within China: A spatial econometric investigation

Abstract As one of the primary causes of the resource curse effect, the “Dutch disease” effect (DDE) at the national level has been widely explored by previous studies. However, a special investigation on the existence and mechanism of the regional DDE within China, the largest developing country in the world, is still absent. Using the panel data of 30 provincial-level regions in China over 1994–2016, this paper for the first time employs the spatial Durbin model to examine the existence and two mechanisms (i.e., the resource movement effect (RME) and the spending effect (SE)) of the regional DDE within China. In particular, to highlight the spatial effect of the DDE and to obtain robust results, we use two kinds of spatial weight matrices in the spatial Durbin model: a traditional symmetric geographical distance weight matrix and a novel asymmetric mixed geography-economy weight matrix. The results show that natural resource sector boom has a negative effect on the development of both local and neighboring manufacturing sectors within China, suggesting that the regional DDE exists at China's provincial level. We also find that the DDE is mainly caused by the energy sector boom and is not evident in both metallic and non-metallic mineral sectors. Additionally, eastern China, central China, and western China all show the symptom of the DDE. Both eastern China and central China show a significantly negative direct effect and an insignificant indirect effect of resource sector boom, while both the direct and indirect effects of resource sector boom are evident in western China. Moreover, the RME and the SE are all responsible for the appearance of the regional DDE within China. On the one hand, resource sector boom induces labor and capital mobility from manufacturing to mining in both local and neighboring regions. On the other hand, resource sector boom raises inflation level in both local and neighboring regions. Finally, based on these findings, we provide some policy recommendations for relieving and avoiding the regional DDE.

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

This paper uses panel data from 30 provinces and cities in China from 2005 to 2018 to conduct an empirical test of path analysis through SEM models. The results show that the “resource curse” phenomenon has appeared in China. At the same time, the system GMM model is used to verify the ways in which financial development affects the relationship between natural resources and economic growth, and finally explore the path to break through the curse of resources through financial development. The conclusions are as follows: (1) There is a negative correlation between natural resources and economic growth, and the resource curse effect is significant in China. At the same time, the results indicate that the degree of financial development is different, and financial development has indeed eased the negative correlation between resource endowment and economic growth. (2) Natural resources endowment has a significant positive correlation with economic fluctuations, while financial development variables are significantly negative, indicating that a developed financial system can weaken the negative correlation brought by natural resources to economic growth through the fluctuation, to a certain extent to ease the “resource curse”. (3) Financial development can alleviate the negative impact of the “crowding effect” on the beneficial factors in the economy by promoting human capital and technological innovation. (4) Finance can effectively pool social idle funds and effectively invest in other socially beneficial constructions, improve investment efficiency, and alleviate the “resource curse” effect.

How does environmental regulation break the resource curse: Theoretical and empirical study on China

This paper incorporates environmental regulation, resource development and economic growth into a unified framework, and introduces a four-sector endogenous growth model, including environmental protection sector and resource development sector. Then, the resource curse coefficients of 232 prefecture-level cities in China are estimated based on the data of China's Industrial Enterprise Database from 1998 to 2013. Finally, the breaking effect of environmental regulation on the resource curse and its internal mechanism are empirically examined. The results show that the resource curse effect mainly occurs in the inland cities of the central and western regions and the northeast region; while the phenomenon of resource curse does not exist in most coastal and eastern cities, only a few cities are in the marginal resource curse areas and serious resource curse areas. The relationship between environmental regulation and the resource curse coefficient presents an inverted U-shaped curve, and only when the environmental regulation intensity crosses the turning point can environmental regulation break the resource curse. Environmental regulation can also indirectly break the resource curse phenomenon in full samples by improving green technological innovation level, lowering resource dependence and accelerating manufacturing development. However, the manufacturing development effect of environmental regulation on the resource curse has not yet been found in the resource curse areas.

Resource curse, environmental regulation and transformation of coal-mining cities in China

Since the Chinese economy has entered the new normal stage, the transformation of China's coal-mining cities has drawn considerable attention at all levels of government in China. In this paper, environmental regulation, resource curse, and economic growth are incorporated into one novel research framework. Based on panel data for 30 typical coal-mining cities, from 2005–2015, we mainly use the system generalized method of moments (SYS-GMM)to analyze the existence of a resource curse and attempt to analyze whether its crowding-out effects can be weakened by environmental regulations. The results show that in the whole sample period, there is a resource curse effect in China's coal-mining cities, and the direct effect of environmental regulation on economic growth presents an “N” curve relationship. In the sub-sample period, although all coal-mining cities have a resource curse effect in the first period (2005–2010), in the second period (2011–2015), the resource curse effect is no longer significant, especially in cities with a high economic development level, and the resource curse has been transformed into resource blessing. Additionally, according to indirect conduction effect analysis, excessive reliance on resources limits the development of human capital, technological innovation, and manufacturing. However, environmental regulations can weaken the transmission of resource dependence by promoting human capital and technological innovation, of which the promotion of technological innovation is the most significant. Therefore, environmental regulation may be a new and notable perspective that can help coal-mining cities turn the “curse” into “blessing” and promote the transformation of their green sustainable development.

Indigenization of staffing in MNEs: The case of Saudi Arabia

In the Gulf States, there has been increased emphasis on requiring MNEs to indigenize their staffing. Based on a survey of 157 HR directors in MNEs headquartered in Saudi Arabia, this article explores why so little headway has been made through applying and extending Resource Curse Theory. Surprisingly, we found formal ties with government had little effect; Resource Curse Theory would suggest this would be due to the concentration of regulatory scrutiny and support on the oil and gas industry, where, indeed, indigenization was most pronounced Again, although they may compensate for regulatory shortfalls, we found intra firm ties made little difference in advancing indigenization. Again, Resource Curse Theory would suggest that non-minerals sectors suffer a drain in capital and human resources, which would make indigenization more challenging. Resource Curse Theory assumes that mineral endowments negatively impact on macroeconomic and societal outcomes, but only accords limited attention to how these pressures are transmitted via organizations. Through providing organizational level evidence, we both further illuminate Resource Curse effects in practice, and contribute to extending the base and scope of application of the theory. We draw out the implications for practice.

Venture capital reputation: a blessing or a curse for entrepreneurial firm innovation\u2014a contingent effect of industrial distance

This study investigates whether venture capital reputation is a blessing or a curse for entrepreneurial firm innovation by using data from 1553 observations of venture capital investments on entrepreneurial firms in China’s New Over-the-Counter (OTC) Market. Advantages that venture capital brings to entrepreneurial firms have been widely acknowledged in extant research. However, our research emphasizes the potential resource outflows rather than inflows when firms are embedded in a shared reputable venture capital, and finds that the curse effect of venture capital reputation on entrepreneurial firms is manifested. Furthermore, we develop the concept of venture capital “intra-industrial reputation” and “extra-industrial reputation” to give a contingent answer to the “blessing or curse” question. The conclusions are drawn indicating that the curse effect is contingent on industrial distance. Venture capital intra-industrial reputation is positively linked to entrepreneurial firm innovation, whereas extra-industrial reputation exerts a strong negative impact, which is responsible for the curse effect.

Network curse effects: research based on listed manufacturing enterprises in China

PurposeAlthough the importance of network embeddedness attracted much attention in recent years, the interpretations of the underlying mechanism almost focus on the positive effects and neglect the potential negative aspects. This paper aims to use Chinese listed manufacturing enterprises, in the perspective of network embeddedness, to analyze whether resource curse effects exist in strategic networks of enterprises.Design/methodology/approachThis paper examines the resource curse effect that exists in enterprise networks through analysis of enterprise’s total factors productivity compared with those of its industry peers with different degrees of embeddedness. This paper then uses several different methods, such as clustered fixed and random effect model, core and peripheral model, and generalized method of moments estimation in endogenous checks, to detect network curse effects and reveal three potential mechanisms, including overinvestment, extra maintaining cost and innovation extrusion.FindingsThis paper finds that excessive network embeddedness hinders continuous improvement of productivity, which is derived from three mechanisms: excessive network embeddedness makes information redundancy among enterprises, and the imitate-follow effect makes excessive investment seriously; enterprises have to encounter more problems and difficulties, such as information coordination and benefit negotiation, to maintain network relationship, which leads to extra cost; enterprises with abundant network resources may tend to more emphasis on marketable operational abilities, resulting in resource decentralization and less investment on innovation, which is finally not beneficial to productivity improvement in the long run.Originality/valueCompared with previous literatures, this paper not only enriches the understanding of negative mechanisms in enterprise`s network embeddedness, but also unfolds the inconsistency of network embeddedness effects in practice and finds new evidence that the two types of network embeddedness are consistent in certain circumstances.

Research on Resource Curse Effect of Resource-Dependent Cities: Case Study of Qingyang, Jinchang and Baiyin in China

For a specific small-scale region with abundant resources, its copious resources tend to dictate the basic direction of its development, and may subsequently give rise to an industrial structure centered on the advantageous resources. This can give rise to an economic structure that lacks diversity, causing the economic development in the entire local region to fall into the dilemma of the resource curse. The present study conducts a case study from the perspective of small-scale regions, incorporating various types of resource-dependent cities in China, including Qingyang, Jinchang, and Baiyin, to interpret and analyze the resource curse effect by calculating a resource curse coefficient. Moreover, based on the regression model, the present study further discusses the empirical relations associated with the resource curse phenomenon. The results show that, regardless of whether a resource-dependent city is in the early, intermediate or late stage of its resource development, economic development is always plagued by the resource curse effect to a certain degree. Resource development cannot promote economic development, rather, it inhibits economic growth to some extent, resulting in an array of effects that are unfavorable to economic development, rendering the development unsustainable. For different types of resource-dependent cities, resource curse effect exhibits distinct characteristics. The resource curse effect is strongest for a resource-dependent city during an economic recession, is less severe during a development period, and is weakest during maturation. Resource development not only has a direct adverse impact on economic growth, but also often affects economic growth in multiple ways and on various levels through the Dutch disease effect, the crowding out effect, and the institution weakening effect. Until now, most results show that there is no obvious resource curse effect at the national and provincial level. The verification results of small-scale regions show that the resource curse effect at the city level still exists. In addition, the resource curse effect differs across different types of resource-dependent cities.

Research on Interactions between the Economy and Environment in Tourism Development: Case of Qingyang, China

Tourism has rapidly developed into one of the world’s largest industries, and represents a new growth point for stimulating a region’s economic and social development. Therefore, a clear understanding of the interactive relationship between the tourism industry, the economy and the environment, as well as the potential mechanisms involved, can play an important role in improving the coordination between these three elements and forming a sustainable development policy. By utilizing quantitative analysis methods and models, this study uses Qingyang City, Gansu Province, as a case study, and tests the relationship between the development of the tourism industry, the economy and the environment. This study makes a number of important conclusions: (1) a mutually promoting relationship does not exist between the development of the tourism industry and economic growth; instead, a unidirectional relationship is found between the two elements. Similarly, a mutually promoting relationship does not exist between the development of the tourism industry and environmental quality; rather, a unidirectional relationship is found between the two elements. (2) The “curse effect” on economic growth imposed by the development of the tourism industry is found to exist. The development of the tourism industry not only exerts a direct negative influence on economic growth, but also adversely affects it in an indirect way through its influence over some transmission factors. Additionally, the curse effect on the environment imposed by the development of the tourism industry is also found to exist. The development of the tourism industry not only imposes a direct negative influence on the environment, but also adversely affects it in an indirect way through its influence over some transmission factors. (3) During the process of regional development, the relationship between the tourism industry, the economy and the environment needs to be correctly addressed. Through effective policies, it should be possible to realize the coordination of and sustainable development between the tourism industry, the economy and the environment.

Institutional Quality, Resource Endowment, and Economic Growth: Evidence from Cross-Country Data

ABSTRACT We empirically examine the moderating role of institutional quality on resource curse effects. The estimated results provide significant evidence for the presence of spatial autocorrelation in economic growth. We also find that institutional quality affects both local and neighboring economies, with the relationship following a U-shaped pattern, and these nonlinear influences can be attributed to resource allocation effects for the former and demonstration effects for the latter. Additionally, resource endowment moderates the relationship between institutional quality and economic performance, with the modified relationship following an inverted U-shaped pattern; this influence stems from investment expansion effects and passivation effects.

Resource Curse Effects on Emerging/Developed Economy MNE Competitiveness and Co-Evolution

We explore competitive and co-evolutionary/co-devolutionary relationships between multinational enterprises from developed economies and their counterparts from “resource cursed” emerging economies...

Coadaptation of mitochondrial and nuclear genes, and the cost of mother's curse.

Strict maternal inheritance renders the mitochondrial genome susceptible to accumulating mutations that harm males, but are otherwise benign or beneficial for females. This 'mother's curse' effect can degrade male survival and fertility if unopposed by counteracting evolutionary processes. Coadaptation between nuclear and mitochondrial genomes-with nuclear genes evolving to compensate for male-harming mitochondrial substitutions-may ultimately resolve mother's curse. However, males are still expected to incur a transient fitness cost during mito-nuclear coevolution, and it remains unclear how severe such costs should be. We present a population genetic analysis of mito-nuclear coadaptation to resolve mother's curse effects, and show that the magnitude of the 'male mitochondrial load'-the negative impact of mitochondrial substitutions on male fitness components-may be large, even when genetic variation for compensatory evolution is abundant. We also find that the male load is surprisingly sensitive to population size: male fitness costs of mito-nuclear coevolution are particularly pronounced in both small and large populations, and minimized in populations of intermediate size. Our results reveal complex interactions between demography and genetic constraints during the resolution of mother's curse, suggesting potentially widespread species differences in susceptibility to mother's curse effects.

Illustrating, Quantifying, and Correcting for Bias in Post-hoc Analysis of Gene-Based Rare Variant Tests of Association.

To date, gene-based rare variant testing approaches have focused on aggregating information across sets of variants to maximize statistical power in identifying genes showing significant association with diseases. Beyond identifying genes that are associated with diseases, the identification of causal variant(s) in those genes and estimation of their effect is crucial for planning replication studies and characterizing the genetic architecture of the locus. However, we illustrate that straightforward single-marker association statistics can suffer from substantial bias introduced by conditioning on gene-based test significance, due to the phenomenon often referred to as “winner's curse.” We illustrate the ramifications of this bias on variant effect size estimation and variant prioritization/ranking approaches, outline parameters of genetic architecture that affect this bias, and propose a bootstrap resampling method to correct for this bias. We find that our correction method significantly reduces the bias due to winner's curse (average two-fold decrease in bias, p < 2.2 × 10−6) and, consequently, substantially improves mean squared error and variant prioritization/ranking. The method is particularly helpful in adjustment for winner's curse effects when the initial gene-based test has low power and for relatively more common, non-causal variants. Adjustment for winner's curse is recommended for all post-hoc estimation and ranking of variants after a gene-based test. Further work is necessary to continue seeking ways to reduce bias and improve inference in post-hoc analysis of gene-based tests under a wide variety of genetic architectures.