Explaining the Heterogeneous Effects of Natural Resources on Local Economic Development
39 Pages Posted: 13 Jun 2016 Last revised: 16 Oct 2018
Date Written: June 9, 2016
This article investigates whether natural resource booms can have heterogeneous effects on local development, depending on the type of resource studied. I employ satellite light data for Colombia and exploit the effects of international price shocks in municipalities with preexisting reserves of gold, coal, and oil. I find that gold and oil producing municipalities see higher light and migration following a price increase relative to the other municipalities. These areas also see a deterioration in socioeconomic outcomes and firm performance in the non-mining sector. The opposite effects are observed for the case of coal.
Keywords: Natural resources, local economic development, crime
JEL Classification: O13, O43, Q34, R11
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