The Private Impact of Public Data: Landsat Satellite Maps Increased Gold Discoveries and Encouraged Entry

How does public data shape the relative performance of incumbents and entrants in the private sector? Using a simple theoretical framework, I argue that public data reduces investment uncertainty, facilitates the discovery of new market opportunities, and increases the relative market share of new entrants relative to incumbents. I shed light on these predictions by estimating the impact of public data from Landsat, a U.S. National Aeronautics and Space Administration satellite mapping program, on the discovery rates of new deposits by incumbents (seniors) and entrants (juniors) in the gold exploration industry. I exploit idiosyncratic timing variation and cloud cover in Landsat coverage across regions to identify the causal effect of public data on the patterns of gold discovery. I find that Landsat data nearly doubled the rate of significant gold discoveries after a region was mapped and increased the market share of new entrants from about 10% to 25%. Public data seem to play an important, yet relatively underexplored, role in driving performance differences across firms.

Automated summary

This research examines the impact of public data on the discovery rates and market share of incumbents and entrants in the gold exploration industry using Landsat satellite mapping data. The study finds that public data significantly increases the rate of significant gold discoveries and the market share of new entrants. Public data play an important role in driving performance differences across firms.