Mining and Structural Change: How Mining Affects Participation in the Global Value Chain

Manegdo Ulrich Doamba ()
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Manegdo Ulrich Doamba: LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne

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Abstract: We examine the relationship between mining activity and participation and positioning in the global value chain in 74 developing countries from 1995-2018. Mining activity can impact countries' participation and especially their positioning in this chain through the changes it induces in the industrial and institutional structure of countries. We use the event study method, taking the activation of mines as the event to be studied, with a study time horizon of five years. Our relatively robust results show that mining activity harms positioning in the global value chain through specialization towards start-of-the-chain industries. The type of mineral extracted, the mode of extraction, and the geographical position play an essential role in this relationship. Three transmission channels explain this result: human capital, total factor productivity, and the Dutch disease.

Keywords: Dutch disease; Natural resources; Mining; Global Value Chain (GVC); Event study (search for similar items in EconPapers)
Date: 2024-05-23
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