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 effect 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. The mechanism is inconsistent with the transmission of institutional quality, but it is consistent with mine owners from wealthier countries inducing different types of local economic activity