Mining Matters: Natural Resource Extraction and Firm-Level Constraints

53 Pages Posted: 25 May 2016 Last revised: 17 Jan 2019

See all articles by Ralph De Haas

Ralph De Haas

European Bank for Reconstruction and Development; Centre for Economic Policy Research (CEPR); KU Leuven

Steven Poelhekke

University of Auckland

Multiple version iconThere are 3 versions of this paper

Date Written: January 2, 2019

Abstract

We estimate the impact of local mining activity on the business constraints experienced by 25,777 firms across nine large and resource-rich countries. We find that the presence of active mines in firms’ immediate vicinity (<20 km) deteriorates the business environment in tradeable sectors. Access to inputs and infrastructure becomes more constrained for these firms and this adversely affects their growth. In contrast, nearby active mines have a positive effect on firms in non-tradeable sectors. Moreover, we show that the presence of mines at a greater distance (21-150 km) relaxes business constraints of all firms, in line with positive regional spending effects.

Keywords: Mining, natural resources, business environment, firm-level constraints

JEL Classification: L16, L25, L72, O12, O13, Q30

Suggested Citation

De Haas, Ralph and Poelhekke, Steven, Mining Matters: Natural Resource Extraction and Firm-Level Constraints (January 2, 2019). Journal of International Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2783443 or http://dx.doi.org/10.2139/ssrn.2783443

Ralph De Haas (Contact Author)

European Bank for Reconstruction and Development ( email )

One Exchange Square
London, EC2A 2JN
United Kingdom

HOME PAGE: www.ebrd.com

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

KU Leuven

Naamsestraat 69
Leuven, B-3000
Belgium

Steven Poelhekke

University of Auckland ( email )

Auckland
New Zealand

HOME PAGE: http://https://sites.google.com/site/stevenpoelhekke/

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