Natural resource production, corruption and expropriation

Arbeitspapier

We develop a formal model that looks at the mutually endogenous determination of foreign direct investments in natural resource-rich countries, the decision of host governments to expropriate these investments, and the level of corruption. Higher resource production makes expropriation more attractive from the perspective of national governments. A low expropriation risk is in turn an important determinant of international investments and is therefore associated with high levels of production. Moreover, resource production leads to high levels of corruption. Our theoretical results are confirmed by estimations of a simultaneous equation model for 50 resource-rich countries in which we endogenize expropriation risk, corruption, and resource production.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: MAGKS Joint Discussion Paper Series in Economics ; No. 36-2014

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; Nonrenewable Resources and Conservation: Government Policy
• Subject: Natural resources ; hold-up problem ; foreign direct investment ; corruption

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dadasov, Ramin ; Hefeker, Carsten ; Lorz, Oliver
• Event: Veröffentlichung
• (who): Philipps-University Marburg, Faculty of Business Administration and Economics
• (where): Marburg
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/102361
• Last update: 10.03.2025, 11:45 AM CET