Mining Matters: Natural Resource Extraction and Local Business Constraints

37 Pages Posted: 21 Dec 2016

See all articles by Ralph De Haas

Ralph De Haas

European Bank for Reconstruction and Development; Centre for Economic Policy Research (CEPR); Tilburg University - Department of Finance

Steven Poelhekke

VU University Amsterdam; De Nederlandsche Bank

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Date Written: November 24, 2016

Abstract

We estimate the impact of local mining activity on the business constraints experienced by 22,150 firms across eight resource-rich countries. We find that with the presence of active mines, the business environment in the immediate vicinity (<20 km) of a firm deteriorates but business constraints of more distant firms relax. The negative local impact of mining is concentrated among firms in tradeable sectors whose access to inputs and infrastructure becomes more constrained. This deterioration of the local business environment adversely affects firm growth and is in line with a natural resource curse at the sub-national level.

Keywords: mining, natural resources, business environment

JEL Classification: L160, L250, L720, O120, O130, Q300

Suggested Citation

De Haas, Ralph and Poelhekke, Steven, Mining Matters: Natural Resource Extraction and Local Business Constraints (November 24, 2016). CESifo Working Paper Series No. 6198, Available at SSRN: https://ssrn.com/abstract=2888286

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

Tilburg University - Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Steven Poelhekke

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

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

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

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