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Diffusion as an Explanation of Oil Nationalization

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  • Stephen J. Kobrin

    (Graduate School of Business, New York University)

Abstract

Following Rogers, diffusion is defined as a process of social communication involving information flows under uncertainty. The international petroleum industry is a complex social system with considerable uncertainty about existing structural conditions, particularly from the point of view of a developing country. The “demonstration effect†of oil production nationalizations has been an important source of information about the balance of country-company power. The Mexican (1938) and Iranian (1951) nationalizations inhibited further takeovers by demonstrating that the companies had the power to discipline nationalizing countries by isolating them from international markets. The North African nationalizations of 1971 were disinhibiting as they demonstrated that underlying structural conditions had changed to the point where industry sanctions were no longer effective. The diffusion hypothesis is tested empirically and shown to be consistent with the data.

Suggested Citation

  • Stephen J. Kobrin, 1985. "Diffusion as an Explanation of Oil Nationalization," Journal of Conflict Resolution, Peace Science Society (International), vol. 29(1), pages 3-32, March.
  • Handle: RePEc:sae:jocore:v:29:y:1985:i:1:p:3-32
    DOI: 10.1177/0022002785029001001
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    References listed on IDEAS

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    1. Collier, David & Messick, Richard E., 1975. "Prerequisites Versus Diffusion: Testing Alternative Explanations of Social Security Adoption," American Political Science Review, Cambridge University Press, vol. 69(4), pages 1299-1315, December.
    2. Frank M. Bass, 1969. "A New Product Growth for Model Consumer Durables," Management Science, INFORMS, vol. 15(5), pages 215-227, January.
    3. Levy, Brian, 1982. "World oil marketing in transition," International Organization, Cambridge University Press, vol. 36(1), pages 113-133, January.
    4. Jodice, David A., 1980. "Sources of change in Third World regimes for foreign direct investment, 1968–1976," International Organization, Cambridge University Press, vol. 34(2), pages 177-206, April.
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    Cited by:

    1. Sergei Guriev & Anton Kolotilin & Konstantin Sonin, 2011. "Determinants of Nationalization in the Oil Sector: A Theory and Evidence from Panel Data," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(2), pages 301-323.
    2. Witold J. Henisz & Bennet A. Zelner & Mauro F. Guillen, 2004. "International Coercion, Emulation and Policy Diffusion: Market-Oriented Infrastructure Reforms, 1977-1999," William Davidson Institute Working Papers Series 2004-713, William Davidson Institute at the University of Michigan.
    3. Mahdavi, Paasha, 2014. "Why do leaders nationalize the oil industry? The politics of resource expropriation," Energy Policy, Elsevier, vol. 75(C), pages 228-243.
    4. Rodrigues, Suzana B. & Dieleman, Marleen, 2018. "The internationalization paradox: Untangling dependence in multinational state hybrids," Journal of World Business, Elsevier, vol. 53(1), pages 39-51.
    5. Abdelrehim, Neveen & Maltby, Josephine & Toms, Steven, 2012. "Accounting for power and control: The Anglo-Iranian oil nationalisation of 1951," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 23(7), pages 595-607.

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