NATURAL RESOURCE, REGIONAL GROWTH, AND HUMAN CAPITAL ACCUMULATION

• Main Author: Zuo, Na
• Format: Others
• Published: UKnowledge 2017
• Subjects: Resource Curse; Economic Growth; Energy Boom; the United States; China; High School Enrollment; Agricultural and Resource Economics; Growth and Development
• Online Access: http://uknowledge.uky.edu/agecon_etds/58; http://uknowledge.uky.edu/cgi/viewcontent.cgi?article=1062&context=agecon_etds

The dissertation research will comprise three essays on the topic of the resource curse hypothesis and its mechanisms. The phenomenon of low economic growth in resource-rich regions is recognized as the “resource curse”. These essays will contribute to an understanding of the regional resource-growth relation within a nation. Essay one tests the resource curse hypothesis at the U.S. state level. With a system of equations model, I decompose the overall resource effect to account for the two leading explanations — crowding-out and institution effects, thus investigate whether the institutions mediate the crowding-out effects. I did not find evidence of an overall negative effect on growth by resource wealth. Both the crowding-out and institution appear present, but they offset: the resource boom crowds out industrial investments, but good institutions mitigate the overall effect. Resources do reduce growth in states with low-quality institutions, including Louisiana, Oklahoma, and Texas. Essay two compares the effects of resource revenues on the economic growth and growth-related factors across Chinese provinces and American states, using panel data from 1990 to 2015. With the Instrumental Variable (IV) strategy, I show that regions with higher resource revenues grow faster than other regions in both China and the U.S. The positive resource effect is larger and more statistically significant in the U.S. Further testing impacts of three resource-related policies in China, e.g. the market price reform, the fiscal reform, and the Western Development Strategy, I show that the market price reform together with the privatization process on coal resources contribute the positive resource effect in China. Though strong and positive resource – growth relations appear in both countries, evidence also suggests consistent negative resource effects on certain growth-related factors in both countries, such as educational attainments and R&D activities. Essay three explores the schooling response to the oil and gas boom, taking advantage of timing and spatial variation in oil and gas well drilling activities. Development of cost-reducing technologies at the time of higher crude oil and natural gas prices in the early 2000s has accelerated shale oil and gas extraction in the United States. I show that intensive drilling activities have decreased grade 11 and 12 enrollment over the 14 year study window − approximately 36 fewer students per county on average and overall, 41,760 fewer students across the 15 states enrolled considered in the analysis. On average, with one additional oil or gas well drilled per thousand initial laborers, grade 11 and 12 enrollment would decrease 0.24 percent at the county level, all else equal. I investigate heterogeneous effects and show that the implied effect of the boom is larger in states with a younger compulsory schooling age requirement (16 years of age instead of 17 or 18), lower state-level effective tax rate on oil and gas productions, traditional mining, non-metro, and persistent poverty counties.