Cost Specification and Firm Behaviour in a Hotelling Model of Resource Extraction

Young, Denise

doi:10.2307/135709

Cited by 40 publications

(17 citation statements)

References 17 publications

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confidence: 99%

“…Early tests by Farrow (1985) and Young (1992), for example, were quite negative. Using the same copper mine data as Young (1992), Slade and Thille (1997) found somewhat more positive results by incorporating a return to risk bearing into the model via the CAPM. They assume that technological progress and the exogenous mineral price follow geometric Brownian motions, but otherwise assume mining costs depend on both current output and cumulative past exploitation.…”

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A model of the operation and development of a National Oil Company

2008

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A model of the operation and development of a National Oil Company

2008

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“…Typically, investigation of the latter questions involves data on input prices and costs which are not available in our data set. Examples of empirical mining papers which do investigate such economic issues include, among many others: Cairns (1981);Farrow (1985); Lasserre (1985);and Young (1992).…”

Section: E¢ Ciency Measurement With Multiple Possibly Undesirable Omentioning

confidence: 99%

What is the environmental performance of firms overseas? An empirical investigation of the global gold mining industry

Koop

Tole

2008

J Prod Anal

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Using a large plant level data set, this paper carries out an econometric analysis of the environmental performance of multinational …rms in the gold mining industry worldwide. The aim of the analysis is to determine if, by looking at the actual environmental performance of …rms (as opposed to inferring such behavior from location decisions), we can shed any light on important questions in the literature on …rm location decisions: Do pollution havens exist in the gold mining industry? Do foreign controlled gold mines perform environmentally worse or better than their domestic counterparts? We develop di¤erent ways of measuring environmental performance within the context of a Bayesian stochastic production frontier approach. In particular, we derive di¤erent ways of measuring technical and environmental e¢ ciency. When we implement these methods in our empirical work, we …nd that results are robust across di¤erent models and ways of measuring e¢ ciency. We …nd that gold mines exhibit a wide range of environmental e¢ ciencies; some are clearly more e¢ cient than others, in other words. However, and most importantly for our questions, we …nd that this variation in e¢ ciencies cannot be systematically related to mine characteristics such as whether they are foreign or domestically controlled or whether they are located in developed or developing countries.Keywords: Bayesian stochastic frontier analysis; e¢ ciency; environmental regulations and plant performance; pollution havens; regulatory chill; gold mining.JEL Classi…cation: Q3, Q56, C11, C23. 2This paper attempts to shed light on important economic and environmental policy questions as: Do …rms operating in developing countries behave di¤erently from those operating in developed countries? Do foreign controlled …rms exhibit di¤erent environmental performance from domestically controlled ones?The answers to these questions have immense economic, welfare and environmental implications for rich and poor countries alike. In this paper, we address these questions using a new data set of gold mines worldwide. From a …rm decision and environmental perspective, the gold mining industry provides an important case study for analysis of these questions: a) It is truly global in the extent of its reach. b) It produces substantial environmental pollution and degradation in comparison to other types of economic activity. Recently, there has been much public concern over and media interest in the environmental costs of gold production, especially in the developing world. For example, the New York Times has recently run a series of articles on the environmental and social impacts of multinational gold mining …rms (see New York Times 2006a,b; 2005a,b,c). It alleges that many …rms -a large number of them Fortune 500 …rms -are breaching national environmental regulations, causing serious pollution and environmental degradation in the process. These claims have been vigorously denied by the companies themselves. In response to the accusations, the world's largest gold pr...

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“…As reported by Young (1992), in the case of minerals the most accessible parts of a deposit are extracted …rst. Depletion of the stock forces the …rm to move to less accessible parts, where unfavorable roof and/or ‡oor conditions increase the extraction costs.…”

Section: Introductionmentioning

confidence: 99%

“…Halvorsen and Smith (1991) and Young (1992) analyze the metal mining industry and …nd signi…cant stock e¤ects.…”

Section: Introductionmentioning

confidence: 99%

Exhaustible Resources, Technology Choice and Industrialization of Developing Countries

Damsgaard

2010

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract How should the world economy adapt to the increased demand for exhaustible resources from countries like China and India? To address that issue, this paper presents a dynamic model of the world economy with two technologies for production; a resource technology, which uses an exhaustible resource as an input and an alternative technology, which does not. I …nd that both the time path of resource extraction and the adoption of the alternative technology depend on the optimal allocation of capital across the technologies, and on the size of the capital stock in relation to the resource stock. In particular, if the capital stock is low, only the resource technology is used initially and the alternative technology is adopted with a delay. Next, I use the model to analyze the e¤ects of industrialization of developing countries on the extraction of oil and technology choice for energy production. As a result of industrialization, the alternative technology for energy production is adopted earlier. Terms of use: Documents in JEL-codes: Q30, Q40

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Cost Specification and Firm Behaviour in a Hotelling Model of Resource Extraction

Cited by 40 publications

References 17 publications

A model of the operation and development of a National Oil Company

A model of the operation and development of a National Oil Company

What is the environmental performance of firms overseas? An empirical investigation of the global gold mining industry

Exhaustible Resources, Technology Choice and Industrialization of Developing Countries

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