Crowding-out effect of coal industry investment in coal mining area: taking Shanxi province in China as a case


The rapid development of coal industry in Shanxi province in China has important effects on its economic development. A large amount of money has been invested into the coal industry and other related industries during the recent years. However, research on the investment effect of Shanxi’s coal industry was rare. In order to analyze the investment effect of coal industry, based on the crowding-out effect model, cointegration test, and the data available in Shanxi Statistical Yearbooks, this paper calculates the effect between coal industry investment and other 17 industry investment. The results show that the investment of coal industry produces crowding-out effect on food industry, building materials industry, and machinery industry. Increasing 1% of the coal industry investment can reduce 0.25% of the food industry investment, or 0.6% of building materials industry investment, or 0.52% of the machinery industry investment, which implies that Shanxi province should adjust coal industrial structure, promote the balance development of coal industry and other industries, so as to promote its economic growth.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2


  1. Abrams BA, Schitz MD (1978) The ‘crowding-out’ effect of governmental transfers on private charitable contributions. Public Choice 33(1):29–39

    Article  Google Scholar 

  2. Abrams BA, Schmitz MD (1984) The crowding-out effect of governmental transfers on private charitable contributions: cross-section evidence. Natl Tax J:563–568

  3. Agosin MR, Machado R (2005) Foreign investment in developing countries: does it crowd in domestic investment? Oxf Dev Stud 33(2):149–162

    Article  Google Scholar 

  4. AmirKhalkhali S, Dar A, AmirKhalkhali S (2003) Saving-investment correlations, capital mobility and crowding-out: some further results. Econ Model 20(6):1137–1149

    Article  Google Scholar 

  5. Andreoni J. (1993) An experimental test of the public-goods crowding-out hypothesis. The American Economic Review 1317–1327

  6. Benedek D, Crivelli E, Gupta S, et al (2012) Foreign aid and revenue: still a crowding-out effect?

  7. Bosetti V, Carraro C, Massetti E et al (2008) International energy R&D spillovers and the economics of greenhouse gas atmospheric stabilization. Energy Econ 30(6):2912–2929

    Article  Google Scholar 

  8. BP (2017) Statistical review of world energy June 2017. Pure print Group Limited

  9. Chen WJ, Hu XY (2011) Discussing on crowding-out effect of the development in the region rich in resource—taking Xinjiang province as an example. Shandong economy 1:143–149 (In Chinese)

    Google Scholar 

  10. Chen Z (2010) Study on the obstacles to economic growth. Economic Management Press, Beijing, p 46 (In Chinese)

    Google Scholar 

  11. China Statistical Press (2016a) China statistical yearbook 2016. China Statistical Press, Beijing

    Google Scholar 

  12. China Statistical Press (2016b) Shanxi statistical yearbook 2016. China Statistical Press, Beijing

    Google Scholar 

  13. Frey BS, Oberholzer-Gee F (1977) The cost of price incentives: an empirical analysis of motivation crowding-out. Am Econ Rev:746–755

  14. Huber LR, Sloof R, Van Praag M (2017) The effect of incentives on sustainable behavior: evidence from a field experiment. Labour Econ 45:92–106

    Article  Google Scholar 

  15. John RM (2008) Crowding-out effect of tobacco expenditure and its implications on household resource allocation in India. Soc Sci Med 66(6):1356–1367

    Article  Google Scholar 

  16. Juarez L (2009) Crowding-out of private support to the elderly: evidence from a demogrant in Mexico. J Public Econ 93(3):454–463

    Article  Google Scholar 

  17. Kim HK (2001) Is there a crowding-out effect between school expenditure and mother’s child care time? Econ Educ Rev 20(1):71–80

    Article  Google Scholar 

  18. Li J (2017) Crowding-out effect of exports on domestic consumption: an analysis based on panel data of several Industries in China. Mod Econ 8(02):172

    Article  Google Scholar 

  19. Lin W, Liu Y, Meng J (2014) The crowding-out effect of formal insurance on informal risk sharing: an experimental study. Games Econ Behav 86:184–211

    Article  Google Scholar 

  20. Martín-Barrera G, Zamora-Ramírez C, González-González JM (2017) Impact of flexibility in public R&D funding: how real options could avoid the crowding-out effect. Renew Sust Energ Rev 76:813–823

    Article  Google Scholar 

  21. Ponds R, Marlet G, van Woerkens C et al (2016) Taxi drivers with a PhD: trickle down or crowding-out for lower educated workers in Dutch cities? Cambridge journal of regions. Econ Soc 9(2):405–422

    Google Scholar 

  22. Popp D, Newell R (2012) Where does energy R&D come from? Examining crowding-out from energy R&D. Energy Econ 34(4):980–991

    Article  Google Scholar 

  23. Romani A Q, Mikkelsen B E, Lund R L (2016). Do crowding-out effects explain low effect of a health promotion intervention among young people at vocational school?. Health Policy

  24. Sen H, Kaya A (2014) Crowding-out or crowding-in? Analyzing the effects of government spending on private investment in Turkey. Panoeconomicus 61(6):631–651

    Article  Google Scholar 

  25. Su YW, Lin HL, Liu LM (2012) Chinese tourists in Taiwan: crowding-out effects, opening policy and its implications. Tour Manag Perspect 4:45–55

    Article  Google Scholar 

  26. Sun Y (2012) The crowding-out effect of science and technology innovation in resource-based region: a case study of Shanxi. Stat Decis 21:142–145

    Google Scholar 

  27. Vollan B (2008) Socio-ecological explanations for crowding-out effects from economic field experiments in southern Africa. Ecol Econ 67(4):560–573

    Article  Google Scholar 

  28. Xinhuanet (2017). Coal production appeared negative growth in Shanxi in 2016 and decreased by 14.4% than 2015. (2017–01-26)

  29. Wang C, Cui YS (2012) The crowding-out effect of real estate investment and its influence on economic growth. Mod Finance Econ 9:E5

    Google Scholar 

  30. Wang D, Ma G, Song X et al (2017) Energy price slump and policy response in the coal-chemical industry district: a case study of Ordos with a system dynamics model. Energy Policy 104:325–339

    Article  Google Scholar 

Download references


The authors express their sincere thanks for the support from the National Science and Technology Major Project under Grant No. 2016ZX05016005-003, the National Natural Science Foundation of China under Grant No.71173200, the Development and Research Center of China Geological Survey under Grant No. 12120114056601 and No. 12120113093200, Research Institute of Petroleum Exploration & Development: Research on the benefit evaluation index system of overseas single well under Grant No. H0719603, China Scholarship Council under Grant No. 201706405007.

Author information



Corresponding author

Correspondence to Yalin Lei.

Additional information

Responsible editor: Philippe Garrigues

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Li, L., Lei, Y., Xu, Q. et al. Crowding-out effect of coal industry investment in coal mining area: taking Shanxi province in China as a case. Environ Sci Pollut Res 24, 23290–23298 (2017).

Download citation


  • Coal industry investment
  • The crowding-out effect model
  • Cointegration test
  • Impact assessment
  • Shanxi province