Economic impact measurement and evaluation of China's investment in geological exploration: The empirical analysis based on the data from 1999 to 2009

With the continued growth in demand for mineral resources and China's efforts in increasing investment in geological prospecting, economic impact evaluation of geological exploration becomes a research hotspot.In this paper, CES production function model is applied to measure the economic impact of geological survey at the industry level. The results suggest that the synergistic contribution of central & local fiscal investments and social capital is significant to the price of mining rights. The most dramatic impact is from social capital, and the next, the impact from local fiscal investment. The central fiscal funds play an important role to link up investments in different prospecting stages and to share the risk. When the relative intensity changes between central fiscal and local fiscal, central fiscal and social capital, local fiscal and social capital in the logarithm square at 1 unit, the price of mining rights has 2.065, 1.359 and 0.178 times the positive long-term effects, respectively.Comparing the different economic impacts of geological survey investment in the eastern, western and central district of China, describing the social capital's pulling effect into geological survey & mining industry and the unit cost trends of the geological survey investment on typical minerals, the research indicates that overall economic outcome of geological exploration is obvious from the four angles of industry and regional output, the capital pulling and the cost management.

► CES production function is applied to measure the economic impact of geological survey.
► Different contributions of central & local fiscal investments and social capital are examined.
► The ratios of regional geological survey investment to mining rights' prices are measured.
► The effect of stimulating social capital to purchasing mining rights is obvious.
► Unit costs of geological survey rise steadily.