Determining factors of investment in mineral exploration

The objective of this study was to identify the critical factors that favour attracting a greater investment in mineral exploration. An explanatory methodology was used. Through econometric models, the relationship and/or interaction between the variables that had an impact on the defined dependent variable was demonstrated. This study used a new proxy variable to quantify geological potential: mining production value. Likewise, a new variable, land area/population, and other variables such as exploration expenditures, index of economic freedom, mining reserves, surface area and population were included. Following the formulations of previous studies, three models were estimated: linear logarithm, normalised and competitiveness model. It is concluded that, the greater the geological potential and investment climate, the higher investment in mineral exploration will be. Meanwhile, high population density leads to the opposite effect. Future studies should consider other variables or even new formulations to more robustly explain the competitiveness of countries to appear attractive to mineral investments.