The Role of Coal Mine Regulation in Regional Development

Hangtian Xu () and Kentaro Nakajima

No 45, PRIMCED Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: In response to the high mortality rates and low productivity in coal mining, China began regulating coal mines in the 1990s, which has reshaped its coal economy. We empirically investigate the relationship between coal mine regulation and economic growth in China. Using two difference-in-difference approaches to compare the pre- and post-regulation periods, as well as regions with and without rich coal endowment, we find that regulation positively affects regional economy. This result is further illustrated using an OLS estimation that uses mortality rate in coal mining as a proxy for measuring the quality of regulation. The impacts are not limited only to the intra-coal industry but also spillover to the economy of related regions by relieving the crowding-out effects of coal abundance, that is, resource abundance tends to crowd out investment, human capital and innovation in non-resource sectors and thus hinders economic growth.

Keywords: coal mine regulation; crowding-out effects; mortality rate; resource curse; regional development (search for similar items in EconPapers)
JEL-codes: L71 O43 P28 Q32 R11 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2013-09
New Economics Papers: this item is included in nep-ene, nep-tra and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:hit:primdp:45

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