A spatial model of investment behaviour for First Nation governments

Omid Mirzaei, David C. Natcher and Eric Micheels

Spatial Economic Analysis, 2021, vol. 16, issue 4, 530-549

Abstract: In this study we investigate the investment behaviour of the First Nation governments (FNGs) ($N = 68$N=68) in Saskatchewan, Canada. FNGs invest revenues into First Nation-owned businesses or through joint ventures with neighbouring FNGs. We argue that in cases of jointly controlled capital stock through joint ventures between multiple FNGs, it is necessary to account for externalities originating from neighbouring FNGs. To test this hypothesis, we developed a spatially augmented model of investment behaviour. The results show that capacity utilization is a major determinant of FNGs’ investment behaviour. Neighbouring FNGs influence the investment behaviour of other FNGs and accounting for other FNGs’ externalities improves explanatory power of empirical models of First Nation investment behaviour.

Date: 2021
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DOI: 10.1080/17421772.2021.1921833

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