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Innovation in the Mining Sector and Cycles in Commodity Prices

Author

Listed:
  • Giulia Valacchi
  • Julio Raffo
  • Alica Daly
  • David Humphreys

Abstract

This paper analyses the evolution of innovation in the mining sector and how this innovation responds to the economic environment, in particular to changes in commodity prices. For this purpose, we combine commodity price data with innovation data as proxied by patent filings extracted from a novel unit record database containing comprehensive patent and firm level data for the mining sector from 1970 to 2015. We include patents registered both by mining companies and mining equipment, technology and service (METS) firms. With a multi-country panel analysis, we find that innovation in the mining sector is cyclical. Innovation increases in periods of high commodity prices while decreasing during commodity price recessions. Our results suggest that innovation increases mostly with long price cycle variations, while mostly unaffected by medium and short cycles. METS related innovation seem the driving force of this mechanism. In contrast, countries specializing in mining industries are found to be slower in reacting to price changes.

Suggested Citation

  • Giulia Valacchi & Julio Raffo & Alica Daly & David Humphreys, 2019. "Innovation in the Mining Sector and Cycles in Commodity Prices," WIPO Economic Research Working Papers 55, World Intellectual Property Organization - Economics and Statistics Division.
    • Handle: RePEc:wip:wpaper:55
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    References listed on IDEAS

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    More about this item

    Keywords

    Mining; Innovation; Price cycles; Supercycles; Commodity prices;
    All these keywords.

    JEL classification:

    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • L78 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Government Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

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