Threats to Industry Survival and Labor Productivity: World Iron-Ore Markets in the 1980's

Posted: 17 Aug 2008

See all articles by Jose E. Galdon-Sanchez

Jose E. Galdon-Sanchez

Universidad Publica de Navarra ; IZA

James A. Schmitz

Federal Reserve Bank of Minneapolis

Date Written: September 1999

Abstract

In the early 1980's, the world steel market collapsed. Since the almost exclusive use of iron-ore is in steel production, many iron-ore mines had to be shut down. We divide the major iron-ore producing countries into groups based on the threat of closure faced by iron-ore mines in the respective country. In countries where mines faced no threat of closure, the iron-ore industry had little or no productivity gain over the decade. In countries where mines faced a large threat of closure, the industry typically had productivity gains ranging from 50 to 100 percent, gains that were unprecedented. We then argue that these productivity increases were not driven by new technology or by the closing of low productivity mines. Hence, the productivity gains were driven by continuing mines, using existing technology, increasing their productivity in order to stay in operation.

Keywords: Iron Ore, Productivity, Threats to Survival

JEL Classification: D24, L71

Suggested Citation

Galdon-Sanchez, Jose E. and Schmitz, James A., Threats to Industry Survival and Labor Productivity: World Iron-Ore Markets in the 1980's (September 1999). Available at SSRN: https://ssrn.com/abstract=1226430

Jose E. Galdon-Sanchez (Contact Author)

Universidad Publica de Navarra ( email )

Department of Economics
Campus de Arrosadia
Pamplona, Navarra 31006
Spain
+34 948 16 9338 (Phone)
+34 948 16 97 21 (Fax)

HOME PAGE: http://www.econ.unavarra.es/~galdon/

IZA

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/en/webcontent/personnel/photos/index_html?key=1494

James A. Schmitz

Federal Reserve Bank of Minneapolis ( email )

90 Hennepin Avenue
Minneapolis, MN 55480
United States

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