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The Role of Coal Mine Regulation in Regional Development

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  • Xu, Hangtian
  • Nakajima, Kentaro

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.

Suggested Citation

  • Xu, Hangtian & Nakajima, Kentaro, 2013. "The Role of Coal Mine Regulation in Regional Development," PRIMCED Discussion Paper Series 45, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:primdp:45
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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/25903/1/No45-dp.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    coal mine regulation; crowding-out effects; mortality rate; resource curse; regional development;

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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