Do localities benefit from natural resource extraction?

Dakshina G. De Silva, Robert P. McComb, Anita R. Schiller

Research output: Contribution to journalReview articlepeer-review

Abstract

There is a strand of the economics literature that considers the regionalized economic effects of natural resource endowments. The so-called Natural Resource Curse suggests that natural resource endowments are associated with lower long-term growth rates in the areas in which the resources are located. Lower growth arises because these areas tend to specialize in the development and exploitation of the natural resources at the expense of other dynamic economic activities that offer higher long-term growth potential. Empirical evidence has, however, not reached consistent conclusions. In this paper, we take advantage of the rapid growth in oil and gas development and production in Texas over the course of a decade to consider the localized effects on inter-industry county-level employment at the NAICS-2, county-level mean and median income, and key public finance measures at both the county and school district levels. Considering the effects within a single, large and economically diverse state enables us to control for important state-level variables that influence local public finances. We find little evidence of short term effects necessary to generate the circumstance of a resource curse over the longer term.

Original languageEnglish
Pages (from-to)185-212
Number of pages28
JournalEnergy Journal
Volume41
Issue number5
DOIs
StatePublished - 2020

Keywords

  • Energy
  • Industry studies
  • Oil and gas
  • Per capita income
  • Public sector revenues and expenditures

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