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Mining investment and a fiscal regime that promotes the investment: an inter-temporal model

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  • Rudy Laguna Inocente
  • Álvaro Orozco Ávalos
  • Madeherick Bejarano Pacheco

Abstract

This paper aims to show how both mining company and government will improve financially by promoting the reinvestment of profits. It will start with a theoretical framework about the mining investing sustainability. Then, an inter-temporal model will be proposed to formalize, theoretically, how the reinvestment will improve, in present value, profits and revenues for both firm and government, respectively. Also, empirical evidence will be shown, particularly, for Peru and Chile. Then, an approach to strong sustainability in Peru will be set by explaining the main variables of sustainability in the Peruvian mining sector as well as its main sustainability items. Finally, some conclusions will be presented.

Suggested Citation

  • Rudy Laguna Inocente & Álvaro Orozco Ávalos & Madeherick Bejarano Pacheco, 2018. "Mining investment and a fiscal regime that promotes the investment: an inter-temporal model," Revista de Análisis Económico y Financiero, Universidad de San Martín de Porres, vol. 1(01), pages 25-41.
    • Handle: RePEc:alp:revaef:01-02
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    References listed on IDEAS

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    1. Pablo Lopez Murphy & Mr. Mauricio Villafuerte & Mr. Rolando Ossowski, 2010. "Riding the Roller Coaster: Fiscal Policies of Nonrenewable Resource Exporters in Latin America and the Caribbean," IMF Working Papers 2010/251, International Monetary Fund.
    2. James Otto & Craig Andrews & Fred Cawood & Michael Doggett & Pietro Guj & Frank Stermole & John Stermole & John Tilton, 2006. "Mining Royalties : A Global Study of Their Impact on Investors, Government, and Civil Society," World Bank Publications - Books, The World Bank Group, number 7105, December.
    3. James Otto & Craig Andrews & Fred Cawood & Michael Doggett & Pietro Guj & Frank Stermole & John Stermole & John Tilton, 2006. "Mining Royalties : A Global Study of Their Impact on Investors, Government, and Civil Society, Appendixes," World Bank Publications - Books, The World Bank Group, number 7136, December.
    4. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39, pages 137-137.
    5. Kjell A. Brekke, 1997. "Economic Growth and the Environment," Books, Edward Elgar Publishing, number 807.
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