Economics at your fingertips  

Natural resource extraction, corruption, and expropriation

Ramin Dadasov (), Carsten Hefeker and Oliver Lorz ()
Additional contact information
Ramin Dadasov: Hertie School of Governance

Review of World Economics (Weltwirtschaftliches Archiv), 2017, vol. 153, issue 4, 809-832

Abstract: Abstract We develop a formal model that looks at the mutually endogenous determination of foreign direct investments in the extraction of natural resources, at the decision of host governments to expropriate these investments, and at the level of corruption. Higher investments in resource extraction make 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 resources extraction. Moreover, investments in the resource sector also raise corruption. Our theoretical predictions are confirmed by estimations of a simultaneous equation model in which we endogenize expropriation risk, corruption, and resource extraction.

Keywords: Natural resources; Expropriation; Foreign direct investment; Institutions (search for similar items in EconPapers)
JEL-codes: F21 D73 Q38 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10290/PS2

Access Statistics for this article

Review of World Economics (Weltwirtschaftliches Archiv) is currently edited by Paul Bergin, Holger Görg, Cédric Tille and Gerald Willmann

More articles in Review of World Economics (Weltwirtschaftliches Archiv) from Springer, Institut für Weltwirtschaft (Kiel Institute for the World Economy) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2019-08-20
Handle: RePEc:spr:weltar:v:153:y:2017:i:4:d:10.1007_s10290-017-0288-y