The (Un)intended Consequences of Export Restrictions: Evidence from Indonesia

Maarten Bosker, Else-Marie Van Den Herik, Paul Pelzl and Steven Poelhekke

No 20791, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: An increasing number of developing countries are restricting non-renewable natural resource exports to encourage domestic processing, move up the global value chain, and spur local development. This paper studies the local labor-market effects of Indonesia’s voluntary export ban on unprocessed nickel and bauxite in 2014, previously a major source of export revenue. Exploiting plausibly exogenous variation in the timing of the ban, opening of new processing facilities, and the location of Indonesia's mineral deposits, we find that — after an initial dip — major investments in nickel processing increased employment in nickel mining districts. New smelters drove structural change, shifting jobs from agriculture to mining and manufacturing. In sharp contrast, the ban only led to very limited investment in bauxite processing, causing bauxite production and local employment to fall. We also find that nickel processing raised mining employment in Indonesia's coal districts, which provide the main source of energy for nickel processing.

Keywords: Industrial policy; Export restrictions; critical minerals; Local development; Global value chains (search for similar items in EconPapers)
JEL-codes: F16 F18 O24 O52 Q3 (search for similar items in EconPapers)
Date: 2025-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP20791 (application/pdf)

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:cpr:ceprdp:20791

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP20791

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().