IDEAS home Printed from
   My bibliography  Save this article

An analysis of the supply-side factors of geological exploration in China based on provincial panel data between 1999 and 2017


  • Zhang, Zhimin
  • Elshkaki, Ayman


Geological exploration inputs' appropriateness is questionable and becomes one of research hotspots in the supply-side reform of geological exploration industry, as China has increased its investment in geological exploration in recent years to secure needed resources. In this study, starting with three theoretical hypotheses, we have constructed transmission chain of geological exploration value with mineral exploration as the core to analyze the appropriateness of the geological exploration inputs, and solve the problem that geological exploration products can't effectively measure their output benefits due to their quasi-public product attributes. To verify the theoretical framework, the effect of geological exploration inputs on mineral outputs and stockpiling has been examined using the Chinese provincial panel data between 1999 and 2017 and the stochastic frontier model. The results show that the investment and exploration rights are excessive, while labor is not, and the excessive investment is caused by fiscal overinvestment. In terms of policy, the government should appropriately reduce fiscal investment in mineral exploration, and gradually withdraw from the commercial mineral exploration sector. The key to improve the effectiveness supply of geological exploration factors' market is to establish a sound market for venture exploration capital and exploration technology services.

Suggested Citation

  • Zhang, Zhimin & Elshkaki, Ayman, 2022. "An analysis of the supply-side factors of geological exploration in China based on provincial panel data between 1999 and 2017," Resources Policy, Elsevier, vol. 76(C).
  • Handle: RePEc:eee:jrpoli:v:76:y:2022:i:c:s030142072200040x
    DOI: 10.1016/j.resourpol.2022.102589

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL:
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Linna, Lu & Lei, Yalin & Jianping, Ge, 2012. "Economic impact measurement and evaluation of China's investment in geological exploration: The empirical analysis based on the data from 1999 to 2009," Resources Policy, Elsevier, vol. 37(3), pages 375-384.
    2. George J. Stigler, 1962. "Information in the Labor Market," NBER Chapters, in: Investment in Human Beings, pages 94-105, National Bureau of Economic Research, Inc.
    3. Frederic H. Murphy & Michael A. Toman & Howard J. Weiss, 1989. "A Dynamic Nash Game Model of Oil Market Disruption and Strategic Stockpiling," Operations Research, INFORMS, vol. 37(6), pages 958-971, December.
    4. Zhang, Xiao-Bing & Fan, Ying & Wei, Yi-Ming, 2009. "A model based on stochastic dynamic programming for determining China's optimal strategic petroleum reserve policy," Energy Policy, Elsevier, vol. 37(11), pages 4397-4406, November.
    5. Han, Aiping & Ge, Jianping & Lei, Yalin, 2015. "An adjustment in regulation policies and its effects on market supply: Game analysis for China’s rare earths," Resources Policy, Elsevier, vol. 46(P2), pages 30-42.
    6. Linna Lu & Yalin Lei, 2013. "Scale Determinants of Fiscal Investment in Geological Exploration: Evidence from China," PLOS ONE, Public Library of Science, vol. 8(10), pages 1-7, October.
    7. Kabdrakhmanova, Marzhan & Memon, Shazim Ali & Saurbayeva, Assemgul, 2021. "Implementation of the panel data regression analysis in PCM integrated buildings located in a humid subtropical climate," Energy, Elsevier, vol. 237(C).
    8. Garcia-Mila, Teresa & McGuire, Therese J & Porter, Robert H, 1996. "The Effect of Public Capital in State-Level Production Functions Reconsidered," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 177-180, February.
    9. Wei, Yi-Ming & Wu, Gang & Fan, Ying & Liu, Lan-Cui, 2008. "Empirical analysis of optimal strategic petroleum reserve in China," Energy Economics, Elsevier, vol. 30(2), pages 290-302, March.
    10. Fan, Songmei & Yan, Jingjing & Sha, Jinghua, 2017. "Innovation and economic growth in the mining industry: Evidence from China's listed companies," Resources Policy, Elsevier, vol. 54(C), pages 25-42.
    11. Chen, Zhenling & Zhang, Xiaoling & Ni, Guohua, 2020. "Decomposing capacity utilization under carbon dioxide emissions reduction constraints in data envelopment analysis: An application to Chinese regions," Energy Policy, Elsevier, vol. 139(C).
    12. ?gel de la Fuente, "undated". "Convergence Across Countries And Regions: Theory And Empirics," UFAE and IAE Working Papers 447.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    13. Castillo, Emilio, 2021. "The impacts of profit-based royalties on early-stage mineral exploration," Resources Policy, Elsevier, vol. 73(C).
    14. Ge, Jianping & Lei, Yalin, 2013. "Mining development, income growth and poverty alleviation: A multiplier decomposition technique applied to China," Resources Policy, Elsevier, vol. 38(3), pages 278-287.
    15. Chen, Zhenling & Li, Jinkai & Zhao, Weigang & Yuan, Xiao-Chen & Yang, Guo-liang, 2019. "Undesirable and desirable energy congestion measurements for regional coal-fired power generation industry in China," Energy Policy, Elsevier, vol. 125(C), pages 122-134.
    16. Moreno, Eduardo & Rezakhah, Mojtaba & Newman, Alexandra & Ferreira, Felipe, 2017. "Linear models for stockpiling in open-pit mine production scheduling problems," European Journal of Operational Research, Elsevier, vol. 260(1), pages 212-221.
    17. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    18. Newell, Richard G. & Pizer, William A., 2003. "Regulating stock externalities under uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 416-432, March.
    19. Melissa Dell, 2010. "The Persistent Effects of Peru's Mining Mita," Econometrica, Econometric Society, vol. 78(6), pages 1863-1903, November.
    20. Zhang, Kuangyuan & Kleit, Andrew N., 2016. "Mining rate optimization considering the stockpiling: A theoretical economics and real option model," Resources Policy, Elsevier, vol. 47(C), pages 87-94.
    21. Castillo, Emilio & Roa, Cintia, 2021. "Defining geological maturity: The effect of discoveries on early-stage mineral exploration," Resources Policy, Elsevier, vol. 74(C).
    22. Paredes, Dusan & Rivera, Nathaly M., 2017. "Mineral taxes and the local public goods provision in mining communities," Resources Policy, Elsevier, vol. 53(C), pages 328-339.
    23. Khalifa Ghali, 1998. "Public investment and private capital formation in a vector error-correction model of growth," Applied Economics, Taylor & Francis Journals, vol. 30(6), pages 837-844.
    24. Ge, Jianping & Lei, Yalin, 2018. "Resource tax on rare earths in China: Policy evolution and market responses," Resources Policy, Elsevier, vol. 59(C), pages 291-297.
    25. Frederic H. Murphy & Michael A. Toman & Howard J. Weiss, 1987. "A Stochastic Dynamic Nash Game Analysis of Policies for Managing the Strategic Petroleum Reserves of Consuming Nations," Management Science, INFORMS, vol. 33(4), pages 484-499, April.
    26. Fischer, Stanley & Frenkel, Jacob A., 1972. "Investment, the two-sector model and trade in debt and capital goods," Journal of International Economics, Elsevier, vol. 2(3), pages 211-233, August.
    27. Matthews, Lane & Heyden, Mariano L.M. & Zhou, Dan, 2022. "Paradoxical transparency? Capital market responses to exploration and exploitation disclosure," Research Policy, Elsevier, vol. 51(1).
    28. Wu, Haitao & Hao, Yu & Ren, Siyu & Yang, Xiaodong & Xie, Guo, 2021. "Does internet development improve green total factor energy efficiency? Evidence from China," Energy Policy, Elsevier, vol. 153(C).
    29. Leontief, Wassily, 1970. "Environmental Repercussions and the Economic Structure: An Input-Output Approach," The Review of Economics and Statistics, MIT Press, vol. 52(3), pages 262-271, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chen, Xin & Mu, Hailin & Li, Huanan & Gui, Shusen, 2014. "Using stockpile delegation to improve China׳s strategic oil policy: A multi-dimension stochastic dynamic programming approach," Energy Policy, Elsevier, vol. 69(C), pages 28-42.
    2. Huanan Li & Xin Chen, 2016. "Dynamic game analysis on China’s public and private oil stockpiles," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 84(1), pages 715-723, October.
    3. Zhang, Xiao-Bing & Qin, Ping & Chen, Xiaolan, 2017. "Strategic oil stockpiling for energy security: The case of China and India," Energy Economics, Elsevier, vol. 61(C), pages 253-260.
    4. Bai, Y. & Zhou, D.Q. & Zhou, P. & Zhang, L.B., 2012. "Optimal path for China's strategic petroleum reserve: A dynamic programming analysis," Energy Economics, Elsevier, vol. 34(4), pages 1058-1063.
    5. Zhang, Xiao-Bing & Zheng, Xinye & Qin, Ping & Xie, Lunyu, 2018. "Oil import tariff game for energy security: The case of China and India," Energy Economics, Elsevier, vol. 72(C), pages 255-262.
    6. Wu, Gang & Wei, Yi-Ming & Nielsen, Chris & Lu, Xi & McElroy, Michael B., 2012. "A dynamic programming model of China's strategic petroleum reserve: General strategy and the effect of emergencies," Energy Economics, Elsevier, vol. 34(4), pages 1234-1243.
    7. Zhang, Xiao-Bing, 2014. "Optimal strategic oil stockpiling and import tariffs: The case of China," Energy Economics, Elsevier, vol. 45(C), pages 463-474.
    8. Fan, Ying & Zhang, Xiao-Bing, 2010. "Modelling the strategic petroleum reserves of China and India by a stochastic dynamic game," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 505-519, July.
    9. Xie, Nan & Yan, Zhijun & Zhou, Yi & Huang, Wenjun, 2017. "China's optimal stockpiling policies in the context of new oil price trend," Energy Policy, Elsevier, vol. 105(C), pages 332-340.
    10. Wu, Gang & Fan, Ying & Liu, Lan-Cui & Wei, Yi-Ming, 2008. "An empirical analysis of the dynamic programming model of stockpile acquisition strategies for China's strategic petroleum reserve," Energy Policy, Elsevier, vol. 36(4), pages 1470-1478, April.
    11. Urrunaga, Roberto & Aparicio, Carlos, 2012. "Infrastructure and economic growth in Peru," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    12. Bai, Y. & Zhou, D.Q. & Zhou, P., 2012. "Modelling and analysis of oil import tariff and stockpile policies for coping with supply disruptions," Applied Energy, Elsevier, vol. 97(C), pages 84-90.
    13. Wang, Chao & Lim, Ming K. & Zhang, Xinyi & Zhao, Longfeng & Lee, Paul Tae-Woo, 2020. "Railway and road infrastructure in the Belt and Road Initiative countries: Estimating the impact of transport infrastructure on economic growth," Transportation Research Part A: Policy and Practice, Elsevier, vol. 134(C), pages 288-307.
    14. Mitra, Arup & Sharma, Chandan & Véganzonès-Varoudakis, Marie-Ange, 2016. "Infrastructure, information & communication technology and firms’ productive performance of the Indian manufacturing," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 353-371.
    15. Marie-Ange VEGANZONES-VAROUDAKIS & Arup MITRA & Chandan SHARMA, 2011. "Total Factor Productivity and Technical Efficiency of Indian Manufacturing: The Role of Infrastructure and Information & Communication Technology," Working Papers 201115, CERDI.
    16. David Canning & Peter Pedroni, 2008. "Infrastructure, Long‐Run Economic Growth And Causality Tests For Cointegrated Panels," Manchester School, University of Manchester, vol. 76(5), pages 504-527, September.
    17. Bai, Y. & Dahl, C.A. & Zhou, D.Q. & Zhou, P., 2014. "Stockpile strategy for China׳s emergency oil reserve: A dynamic programming approach," Energy Policy, Elsevier, vol. 73(C), pages 12-20.
    18. Diaz-Bautista, Alejandro, 2002. "The role of telecommunications infrastructure and human capital: Mexico´s economic growth and convergence," ERSA conference papers ersa02p102, European Regional Science Association.
    19. Zhu, Bo & Deng, Yuanyue & Lin, Renda & Hu, Xin & Chen, Pingshe, 2022. "Energy security: Does systemic risk spillover matter? Evidence from China," Energy Economics, Elsevier, vol. 114(C).
    20. Jiao, Jian-Ling & Han, Kuang-Yi & Wu, Gang & Li, Lan-Lan & Wei, Yi-Ming, 2014. "The effect of an SPR on the oil price in China: A system dynamics approach," Applied Energy, Elsevier, vol. 133(C), pages 363-373.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:76:y:2022:i:c:s030142072200040x. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.