Study on the mechanism of energy abundance and its effect on sustainable growth in regional economies: A case study in China

• The effects of energy abundance on economic growth are investigated in China.
• The “resource curse thesis” is not supported at the provincial level in China.
• Energy abundance affects economic growth through three primary transmission routes.

In the present work, the effects of energy abundance on sustainable economic growth and the mechanisms of this phenomenon were investigated using panel data from 31 areas (including provinces, autonomous regions, and municipalities) in China during the period from 2003 to 2012. The results indicate that the so-called “resource curse thesis” is not supported by the development of China at the provincial level. When several important variables—such as fixed capital, human capital, innovation input, regional openness, and foreign direct investment—are controlled, energy abundance exhibits a significantly positive correlation with economic growth rate. The so-called “Dutch disease”, human capital, and institutional quality are three primary transmission routes through which energy abundance affects economic growth. Among these routes, human capital exhibits the maximum positive transmission effect. Employment in the manufacturing industry can be crowded out by energy abundance, and the institution will be weakened to a certain degree. To promote sustainable economic growth in resource-abundant regions, long-term planning, optimization of industrial structure, and nurturing a good business environment should be supported and developed.