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Mining matters: Natural resource extraction and firm-level constraints

Ralph De Haas and Steven Poelhekke

Journal of International Economics, 2019, vol. 117, issue C, 109-124

Abstract: We estimate the impact of local mining activity on the business constraints experienced by 25,777 firms across nine large and resource-rich countries. We find that the presence of active mines in firms' immediate vicinity (<20 km) deteriorates the business environment in tradeable sectors. Access to inputs and infrastructure becomes more constrained for these firms and this adversely affects their growth. In contrast, nearby active mines have a positive effect on firms in non-tradeable sectors. Moreover, we show that the presence of mines at a greater distance (21–150 km) relaxes business constraints of all firms, in line with positive regional spending effects.

Keywords: Mining; Natural resources; Business environment; Firm-level constraints (search for similar items in EconPapers)
JEL-codes: L16 L25 L72 O12 O13 Q30 (search for similar items in EconPapers)
Date: 2019
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