Two-component conductors - e.g., semimetals and narrow-band semiconductors - often exhibit unusually strong magnetoresistance in a wide temperature range. Suppression of the Hall voltage near charge neutrality in such systems gives rise to a strong quasiparticle drift in the direction perpendicular to the electric current and magnetic field. This drift is responsible for a strong geometrical increase of resistance even in weak magnetic fields. Combining the Boltzmann kinetic equation with sample electrostatics, we develop a microscopic theory of magnetotransport in two and three spatial dimensions. The compensated Hall effect in confined geometry is always accompanied by electron-hole recombination near the sample edges and at large-scale inhomogeneities. As the result, classical edge currents may dominate the resistance in the vicinity of charge compensation. The effect leads to linear magnetoresistance in two dimensions in a broad range of parameters. In three dimensions, the magnetoresistance is normally quadratic in the field, with the linear regime restricted to rectangular samples with magnetic field directed perpendicular to the sample surface.
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