Scandinavian Working Papers in Economics
Discussion Papers on Economics,
University of Southern Denmark, Department of Economics
No 15/2013: How Much Did China's WTO Accession Increase Economic Growth in Resource-Rich Countries?
Thomas Barnebeck Andersen (), Mikkel Barslund, Casper Worm Hansen, Thomas Harr and Peter Sandholt Jensen ()
Additional contact information
Thomas Barnebeck Andersen: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Mikkel Barslund: Center for European Policy Studies, Postal: Congresplaats 1, 1000 City of Brussels, Belgium
Casper Worm Hansen: Department of Economics, Postal: Aarhus University, Fuglesangs Allé 4, DK-8210 Aarhus V, Denmark
Thomas Harr: Standard Chartered Bank, Postal: Marina Bay Financial Centre (Tower 1), 8 Marina Boulevard, Level 18, Singapore 018981
Peter Sandholt Jensen: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Abstract: We provide an estimate of China’s impact on the growth rate of resource-rich countries after its WTO accession on 11 December 2001. Our empirical approach follows the logic of the differences-in-differences estimator. In addition to temporal variation arising from the WTO accession, which we argue was exogenous to other countries’ growth trajectories, we exploit spatial variation arising from differences in natural resource wealth. This allows us to compare changes in economic growth in the post-accession period relative to the pre-accession period between countries that were able to benefit from the surge in demand for industrial commodities brought about by China’s WTO accession and countries that were less able to do so. We find that roughly one tenth of average annual post-accession growth in resource-rich countries was due to China’s increased appetite for commodities. We use this finding to inform the debate about what will happen to economic growth in resource-rich countries as China rebalances and its demand for commodities weakens.
Keywords: Economic growth; natural resources; WTO; China
26 pages, October 3, 2013
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