The Visible Hand: National Oil Companies, Oil Supply and the Ermergence of the Hotelling Rent
AbstractUsing 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Faculty of Business and Economics - University of Basel in its series Working papers with number 2012/11.
Date of creation:
Date of revision:
Hotelling-rent; oil supply; national firms;
Find related papers by JEL classification:
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Junsoo Lee & John A. List & Mark C. Strazicich, 2005.
"Nonrenewable Resource Prices: Deterministic or Stochastic Trends?,"
05-20, Department of Economics, Appalachian State University.
- Lee, Junsoo & List, John A. & Strazicich, Mark C., 2006. "Non-renewable resource prices: Deterministic or stochastic trends?," Journal of Environmental Economics and Management, Elsevier, vol. 51(3), pages 354-370, May.
- Junsoo Lee & John A. List & Mark Strazicich, 2005. "Nonrenewable Resource Prices: Deterministic or Stochastic Trends?," NBER Working Papers 11487, National Bureau of Economic Research, Inc.
- Long, Ngo Van, 1975. "Resource extraction under the uncertainty about possible nationalization," Journal of Economic Theory, Elsevier, vol. 10(1), pages 42-53, February.
- John Livernois & Henry Thille & Xianqiang Zhang, 2006.
"A test of the Hotelling rule using old-growth timber data,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 39(1), pages 163-186, February.
- Livernois, J. & Thille, H. & Zhang, X., 2003. "A Test of the Hotelling Rule Using Old-Growth Timber Data," Working Papers 2003-4, University of Guelph, Department of Economics.
- Eduardo Engel & Ronald Fischer, 2008.
"Optimal Resource Extraction Contracts under Threat of Expropriation,"
Cowles Foundation Discussion Papers
1636, Cowles Foundation for Research in Economics, Yale University.
- Eduardo Engel & Ronald Fischer, 2008. "Optimal Resource Extraction Contracts under Threat of Expropriation," Levine's Bibliography 122247000000001833, UCLA Department of Economics.
- Eduardo Engel & Ronald Fischer, 2008. "Optimal resource extraction contracts under threat of expropriation," Documentos de Trabajo 244, Centro de Economía Aplicada, Universidad de Chile.
- Eduardo Engel & Ronald Fischer, 2008. "Optimal Resource Extraction Contracts Under Threat of Expropriation," Working Papers 960, Economic Growth Center, Yale University.
- Engel, Eduardo & Fischer, Ronald, 2008. "Optimal Resource Extraction Contracts under Threat of Expropriation," Working Papers 34, Yale University, Department of Economics.
- Eduardo Engel & Ronald Fischer, 2008. "Optimal Resource Extraction Contracts Under Threat of Expropriation," NBER Working Papers 13742, National Bureau of Economic Research, Inc.
- Lee, Kiseok & Ni, Shawn, 2002. "On the dynamic effects of oil price shocks: a study using industry level data," Journal of Monetary Economics, Elsevier, vol. 49(4), pages 823-852, May.
- James D. Hamilton, 2008.
"Understanding Crude Oil Prices,"
NBER Working Papers
14492, National Bureau of Economic Research, Inc.
- Berck, Peter & Roberts, Michael, 1996. "Natural Resource Prices: Will They Ever Turn Up?," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 65-78, July.
- Stiglitz, Joseph E, 1976. "Monopoly and the Rate of Extraction of Exhaustible Resources," American Economic Review, American Economic Association, vol. 66(4), pages 655-61, September.
- Chen, K.C. & Chen, Shaoling & Wu, Lifan, 2009. "Price causal relations between China and the world oil markets," Global Finance Journal, Elsevier, vol. 20(2), pages 107-118.
- Slade, Margaret E., 1982. "Trends in natural-resource commodity prices: An analysis of the time domain," Journal of Environmental Economics and Management, Elsevier, vol. 9(2), pages 122-137, June.
- repec:ebl:ecbull:v:3:y:2006:i:14:p:1-12 is not listed on IDEAS
- John Livernois, 2009. "On the Empirical Significance of the Hotelling Rule," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(1), pages 22-41, Winter.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (WWZ).
If references are entirely missing, you can add them using this form.