Investor Origin and Deforestation: Evidence from Global Mining Sites
Victoria Wenxin Xie, Ran Goldblatt and Wei You
Abstract:
Does mining activity lead to deforestation? How does investor origin affect the environmental externalities of mining operations? We investigate these questions by estimating the causal impact of demand-driven mineral price booms on deforestation near mining sites on a global scale. Combining mine property-level data with high-resolution satellite imagery on forest cover, we find a positive elasticity of deforestation to mineral price shocks. This elasticity is lower when mine owners are from higher-income countries, but it is not affected by host country characteristics. The mechanism is consistent with mine owners from higher-income countries inducing different types of local economic activity and transmitting their institutional quality .