The Visible Hand: National Oil Companies, Oil Supply and the Ermergence of the Hotelling Rent

Arbeitspapier

Using firm-level panel data, this paper exposes differences in the dynamic oil produc- tion regime between private and state-owned firms. I find that state-owned firms reduce the oil supply, ceteris paribus, by 3.5 percent each year, but private firms hold output constant. Furthermore, state-owned firms have not followed such stringent policy before 1997. My ex- tension of the Hotelling-model attributes the behavior of state-owned firms to a scarcity rent, whereas private firms produce at their constant capacity limit, owing to possible expropriation. The theory also indicates that state-owned firms will only switch to a Hotelling-regime after a certain lag time, attributable to limited capacity. The data further reveals that contractions in the supply of state-owned oil lead to oil price increases, indicating that state-owned firms do, in fact, generate a scarcity rent. My results therefore suggest that the shift from private towards state-owned oil dominance in the 1970s gave rise to a delayed increasing oil price path.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WWZ Discussion Paper ; No. 2012/11

Classification and Topics

• Classification: Wirtschaft
• Subject: Hotelling-rent ; oil supply ; national firms ; Ölpreis ; Produktionskapazität ; Vergleich ; Öffentliches Unternehmen ; Privatwirtschaft ; Hotelling-Modell ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ludwig, Markus
• Event: Veröffentlichung
• (who): University of Basel, Center of Business and Economics (WWZ)
• (where): Basel
• (when): 2012

Further information

• DOI: doi:10.5451/unibas-ep61211
• Handle: http://hdl.handle.net/10419/123440
• Last update: 10.03.2025, 11:45 AM CET