In response to high mortality rates and low productivity in coal mining, China began regulating coal mines in the 1990s, reshaping its coal economy. We investigate the relationship between coal mine regulation and economic growth. Using the difference-in-difference approach to compare the pre- and post-regulation periods as well as regions heavily and lightly affected by regulation, we find that regulation positively affects a regional economy. Results are illustrated by estimations that use mortality rates in coal mining as a proxy for measuring regulation quality. Regulation effects are not limited to the intra-coal industry but also apply to spillover by relieving the crowding-out effects of coal abundance.
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