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Does acquisition of mineral resources by firms in resource-importing countries reduce resource prices?

Tamaki Morita, Keisaku Higashida, Yasuhiro Takarada and Shunsuke Managi

Resources Policy, 2018, vol. 58, issue C, 97-110

Abstract: This study theoretically and empirically examines how resource prices are affected when firms in resource-importing countries acquire mineral resources. The study's theoretical examination considers a simple, two-period model that demonstrates how firms acquiring mineral resources may raise either present or future resource prices. This finding implies that resource consumption in either period may decline. Strategic behavior of resource-mining firms, demand for final goods, and extraction costs play key roles in this examination. Using a dynamic panel model with oil price data, the study's empirical portion estimates how acquiring resources affects the price of oil. Results demonstrate that prices in the present period rise, and prices in future periods decline.

Keywords: Acquisition of mineral resources; Extraction cost; Resource price; Resource-importing countries (search for similar items in EconPapers)
JEL-codes: Q31 Q34 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:jrpoli:v:58:y:2018:i:c:p:97-110