Mining expansion’s effects: when the mining sector’s development affects firms’ performances

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: Mining currently capitalizes on the energy transition that fuels the demand for ores. However, the macroeconomics literature has extensively documented the adverse effects of the development of natural resource sectors on the other sectors of the economy. This study uses firm-level data to examine the effects of mining on firm performance in developing countries. Drawing from the Dutch disease and the resource curse literature, we examine mining effects on the manufacturing sector using a multilevel mixed model. We built an original dataset that merges data from the World Bank Enterprise Surveys data and the Minex database on mining. The used database is a sample of 15,642 firms disseminated in 44 developing countries from 2006 to 2020. The results show that manufacturing firms underperform when mining grows, thus supporting the Dutch disease hypothesis. Our main finding is robust to several checks. We examine various transmission channels provided by the literature: competitiveness losses induced by the exchange rate appreciation, poor governance, and labor force shifts. Our results highlight the potential conflict between energy transition and firm performance.

Keywords: Mixed multilevel model; Manufacturing firm performance; Developing countries; Dutch disease; Resource booms (search for similar items in EconPapers)
Date: 2025-11-17
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Published in Mineral Economics, 2025, ⟨10.1007/s13563-025-00568-w⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05650514

DOI: 10.1007/s13563-025-00568-w

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