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Natural Resource Production, Corruption and Expropriation
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 attracti...
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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 36-2014) |
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| Main Authors: | , , |
| Format: | Article |
| Language: | English |
| Published: |
Philipps-Universität Marburg
2024
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| Subjects: | |
| Online Access: | PDF Full Text |
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| Summary: | 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. |
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| Physical Description: | 25 Pages |
| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2024.0337 |