The effects of natural resource extraction on the financial performance of local firms

This thesis estimates the impact of local resource extractive industries on firms’ financial performance across 15 post-communist economies in Europe. The thesis analysed separately the local firm effects of oil and gas industries, and the minerals and metals industries. We find that the nature of natural resource matters in terms of their impact on the local economy. The presence of oil and gas fields in firms’ immediate vicinity (0 – 15 km) improves the financial performance of these local firms. However, little or no impact is found for firms located within close proximity to mines. Moreover, our results show no evidence of local ‘Dutch disease’ effects. In addition, we find that the business environment that firms operate within does not exert a differential effect between firms that operate close to or distant from the location of the extractive industries.