Mining Matters: Natural Resource Extraction and Firm-Level Constraints
53 Pages Posted: 25 May 2016 Last revised: 17 Jan 2019
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Mining Matters: Natural Resource Extraction and Local Business Constraints
Mining Matters: Natural Resource Extraction and Firm-Level Constraints
Mining Matters: Natural Resource Extraction and Local Business Constraints
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: Suggested Citation