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The Effects of Resource Depletion on Coal Mining Productivity

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  • Arias, Carlos
  • Rodríguez, Xosé Antón

Abstract

The Solow Residual has a direct interpretation as a measure of technical change under perfect competition and constant returns to scale. When these conditions do not hold, the residual has to be appropriately adjusted in order to be considered correct measure of technical change. We argue that in extractive industries the Solow Residual is also affected by the continuous depletion of a non-renewable resource. Therefore, we provide a new decomposition of the Solow Residual for extractive industries in which the level of reserves is likely to affect extraction costs. Our empirical results illustrate the role played by the depletion of reserves in the measurement of productivity of coal mining in Spain.

Suggested Citation

  • Arias, Carlos & Rodríguez, Xosé Antón, 2005. "The Effects of Resource Depletion on Coal Mining Productivity," Efficiency Series Papers 2005/06, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    • Handle: RePEc:oeg:wpaper:2005/06
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    Cited by:

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    2. Rodríguez, Xosé A. & Arias, Carlos & Rodríguez-González, Ana, 2015. "Physical versus economic depletion of a nonrenewable natural resource," Resources Policy, Elsevier, vol. 46(P2), pages 161-166.
    3. Leena Grandell & Charles A.S. Hall & Mikael Höök, 2011. "Energy Return on Investment for Norwegian Oil and Gas from 1991 to 2008," Sustainability, MDPI, vol. 3(11), pages 1-21, October.
    4. Tsakiridis, Andreas & Hanrahan, Kevin & Breen, James & Wallace, Michael & O’Donoghuea, Cathal, 2016. "Feed substitution and economies of scale in Irish beef production systems," 149th Seminar, October 27-28, 2016, Rennes, France 244769, European Association of Agricultural Economists.
    5. Ediger, Volkan Ş. & Berk, Istemi & Ersoy, Mücella, 2015. "An assessment of mining efficiency in Turkish lignite industry," Resources Policy, Elsevier, vol. 45(C), pages 44-51.
    6. Villena, Marcelo & Greve, Fernando, 2018. "On resource depletion and productivity: The case of the Chilean copper industry," Resources Policy, Elsevier, vol. 59(C), pages 553-562.
    7. Sam Mitra, 2019. "Depletion, technology, and productivity growth in the metallic minerals industry," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 32(1), pages 19-37, April.
    8. Rodríguez, Xosé A. & Loureiro, Maria L. & Arias, Carlos, 2021. "Measuring productivity in the extractive industries. Evidence from Spanish fluorite mining," Resources Policy, Elsevier, vol. 73(C).
    9. John E. Tilton, 2013. "Cyclical and Secular Determinants of Productivity in the Copper, Aluminum, Iron Ore, and Coal Industries," Working Papers 2013-11, Colorado School of Mines, Division of Economics and Business.
    10. Simon Zheng & Harry Bloch, 2014. "Australia’s mining productivity decline: implications for MFP measurement," Journal of Productivity Analysis, Springer, vol. 41(2), pages 201-212, April.

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