Sunday, September 25, 2016

Mining matters: Natural resource extraction and local business constraints




Research on VOXEU from

Ralph de Haas (EBRD) and Steven Poelhekke (VU Amsterdam):


Summary:
The extraordinary expansion in global mining activity over the last two decades, and its increasing concentration in emerging markets, has reignited the debate over the impact of mining on local economic activity. This column analyses how the presence of nearby mines influences firms in eight countries with large manufacturing and mining sectors. Mines are found to out-compete local manufacturing firms for inputs, labour, and infrastructure. However, mining activity is found to improve the business environment on a wider geographic scale.

Tuesday, September 20, 2016

New OxCarre research: Resource discoveries and FDI bonanzas




New OxCarre research from:

Gerhard Toews (OxCarre) and Pierre-Louis Vezina (King's College London)


Abstract:
This paper examines the effect of giant oil and gas discoveries on foreign direct
investment in developing economies using a new project-level dataset. We document
a large increase in non-extraction FDI in the 2 years following a giant discovery, an
event which is unpredictable due to the uncertain nature of exploration. We find
that FDI inows increase by 73% and that this wave is driven by a 37% increase
in the number of FDI projects as well as a 22% increases in source countries and
a 17% increase in target sectors. We interpret this FDI response as evidence for the
news-driven business-cycle hypothesis within a developing country setting and highlight
FDI bonanzas as an important development channel for resource rich economies.




Tuesday, September 13, 2016

Mongolia: Living from loan to loan

Article in the FT:

Since the commodities boom turned to bust, the country has traded self-sufficiency for indebtedness.

Read on here.

Wednesday, July 27, 2016

Poverty Maps and Darkness

From the updated OxCARRE paper [pdf, oxcarre.ox.ac.uk], Left in the Dark of Brock Smith [brockdsmith.com] and Sam Wills [wordpress.com] come these interesting maps on rural poverty.

Read on at Sam's website [wordpress.com]

Friday, July 15, 2016

New Research: Labor market dynamics and the unconventional natural gas boom: Evidence from the Marcellus region

Timothy M. Komarek ([sites.google.com], Old Dominion University) writes on

Labor market dynamics and the unconventional natural gas boom: Evidence from the Marcellus region
Abstract
The energy extraction boom of the mid 2000s impacted local economies in areas with substantial shale oil and gas reserves. I examine the impact of the energy boom on the labor market by exploiting a natural experiment in the Marcellus region. In particular, I compare counties with fracking activity in Pennsylvania, Ohio and West Virginia to the control group of counties in New York, which imposed a moratorium and later ban on fracking. I look at how the benefits to the labor demand shock are shared between industries as well as how employment and wages in related industries adjust over the course of the resource boom. The results suggest total employment and wages per job increase by 7% and 11% respectively above pre-boom levels in the three years after the boom, but decline after 4 years or more. The results also show significant positive spillovers to related sectors, such as construction, transportation, retail trade and accommodations. However, there is no evidence of the so called ‘resource curse’ crowding out employment or increasing wages in manufacturing.
Published in Resource and Energy Economics, Volume 45, August 2016, Pages 1–17, available here [sciencedirect.com].

Wednesday, July 13, 2016

New research: Resource revenue management and wealth neutrality in Norway


Klaus Mohn ([uis.no], University of Stavanger) writes on

Resource revenue management and wealth neutrality in Norway
Abstract:
An important idea behind the Norwegian oil fund mechanism and the fiscal spending rule is to protect the non-oil economy from the adverse effects of excessive spending of resource revenues over the Government budget. A critical assumption in this respect is that public sector saving is not being offset by private sector dissaving, which is at stake with the hypothesis of Ricardian equivalence. Based on a framework of co-integrating saving rates, this model provides an empirical test of the Ricardian equivalence hypothesis on Norwegian time series data. Although the model rejects the strong-form presence of Ricardian equivalence, results indicate that the Norwegian approach does not fully succeed in separating spending of resource revenues from the accrual of the same revenues.

Published in Energy Policy, Volume 96, September 2016, Pages 446–457, find here [sciencedirect.com]

Thursday, June 30, 2016

FT: Big Oil: From black to green

From the FT: Big Oil: From black to green
Despite pressure to develop renewables, many energy majors see more money in traditional markets
Highlighting the different attempts of big oil companies to diversify to green energy, with a distinct difference apparently between European and US companies.

Read on here