Attracting mining investments: the relationship between natural endowments and public policies

José Joaquín Jara (), Stefano Delucchi, David Peters, Gustavo Lagos and Carlos Marquardt
Additional contact information
José Joaquín Jara: Pontificia Universidad Católica de Chile
Stefano Delucchi: Pontificia Universidad Católica de Chile
David Peters: Pontificia Universidad Católica de Chile
Gustavo Lagos: Pontificia Universidad Católica de Chile
Carlos Marquardt: Pontificia Universidad Católica de Chile

Mineral Economics, 2020, vol. 33, issue 1, No 19, 243 pages

Abstract: Abstract Mining jurisdictions avid to attract international investments to find and exploit their mineral deposits contend for international capitals. This led to policymakers, analysts, and companies to think about the factors affecting the competitiveness of mining districts. The traditional paradigm states that the capacity of a country or jurisdiction to attract investments and develop its local industry is a function exclusively of the quantity and quality of the ore deposits within its territory. On the other hand, the alternative view suggests that the previous conception is incomplete, because companies not only look for a good geologic potential but also for a favorable investment climate (Tilton 1992). Through cross-country econometric models covering the years 1996 to 2014, this work supports the alternative paradigm of mining competitiveness and tries to contribute to a better understanding of the relationship between the geological potential and the investment climate when determining the attraction of mining investments. The study concludes that, in order to develop a local mining industry, a country should have a wealthy natural endowment, but also it must offer a good investment climate. In addition, it shows that both variables are related through a multiplicative effect, but once public policies and other contextual variables reach certain reasonable levels (the “investment climate threshold”), jurisdictions compete almost exclusively based on its natural endowment. These results have significant implications for the implementation of public policies, especially in periods when mining contribution to social welfare is under scrutiny.

Keywords: Competitiveness; Geologic potential; Investment climate; Cross-country models; Exploration expenditures; Index of economic freedom (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s13563-020-00230-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:minecn:v:33:y:2020:i:1:d:10.1007_s13563-020-00230-7

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/13563

DOI: 10.1007/s13563-020-00230-7

Access Statistics for this article

Mineral Economics is currently edited by Magnus Ericsson and Patrik Söderholm

More articles in Mineral Economics from Springer, Raw Materials Group (RMG), Luleå University of Technology
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().