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| Duncan, Roderick. |
| Expropriations of foreign direct investment in developing countries are typically blamed on political and economic crises in those countries. Developing a new database of expropriations in the minerals sectors of developing country exporters, I show that expropriations were correlated with mineral price booms and that democratic governments were more likely to expropriate. No link is found between expropriations and political or economic crises, except at independence. A better explanation of expropriation would be opportunistic behaviour by host governments when profits of investments are high. In two developed countries, Australia and Canada, expropriations are also found to occur during price booms. |
| Tipo: Journal Article |
Palavras-chave: Expropriation; Foreign direct investment; Natural resources; Resource /Energy Economics and Policy. |
| Ano: 2006 |
URL: http://purl.umn.edu/116859 |
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| Di Corato, Luca. |
| A government bargains a mutually convenient agreement with a multinational corporation to extract a natural resource. The corporation bears the initial investment and earns as a return a share on the profits. The host country provides access and guarantee conditions of operation. Being the investment totally sunk, the corporation must account in its plan not only for uncertainty on market conditions but also for the threat of nationalization. In a real options framework where the government holds an American call option on nationalization we show under which conditions a Nash bargaining is feasible and leads to attain a cooperative agreement maximizing the joint venture surplus. We find that the threat of nationalization does not affect the investment time... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Real Options; Nash Bargaining; Expropriation; Natural Resources; Foreign Direct Investment; Financial Economics; C7; D8; K3; F2; O1. |
| Ano: 2010 |
URL: http://purl.umn.edu/59378 |
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