Resource-based cities and the Dutch disease

Hajime Takatsuka, Dao-Zhi Zeng, Laixun Zhao

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

This paper examines the relationship between resource development and industrialization. When transport costs are high, the region with a more valuable natural resource enjoys a higher welfare than the other region. However, as transport costs decrease, firms begin to move out of the region, causing the Dutch disease to occur, initially in terms of industry share, and eventually in terms of welfare too when transport is sufficiently free. A resource boom in intermediate inputs may strengthen the tendency for manufacturing agglomeration in the same region, but a resource boom in consumption inputs will weaken this tendency. The model thus provides insight for cities to utilize their limited resources efficiently.

Original languageEnglish
Pages (from-to)57-84
Number of pages28
JournalResource and Energy Economics
Volume40
DOIs
Publication statusPublished - 2015 May 1

Keywords

  • Dutch disease
  • Industrialization
  • Resource goods
  • Resource-based cities
  • Transport costs

ASJC Scopus subject areas

  • Economics and Econometrics

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