IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2011-251.html
   My bibliography  Save this paper

What Drives the Global Land Rush?

Author

Listed:
  • Mr. Harris Selod
  • KLAUS DEININGER
  • Mr. Rabah Arezki

Abstract

This paper studies the determinants of foreign land acquisition for large-scale agriculture. To do so, gravity models are estimated using data on bilateral investment relationships, together with newly constructed indicators of agro-ecological suitability in areas with low population density as well as indicators of land rights security. Results confirm the central role of agro-ecological potential as a pull factor. In contrast to the literature on foreign investment in general, the quality of the business climate is insignificant whereas weak land governance and tenure security for current users make countries more attractive for investors. Implications for policy are discussed.

Suggested Citation

  • Mr. Harris Selod & KLAUS DEININGER & Mr. Rabah Arezki, 2011. "What Drives the Global Land Rush?," IMF Working Papers 2011/251, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2011/251
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=25320
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Guillermo A. Calvo & Leonardo Leiderman & Carmen M. Reinhart, 1996. "Inflows of Capital to Developing Countries in the 1990s," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 123-139, Spring.
    2. James R. Markusen & Anthony J. Venables, 2021. "The theory of endowment, intra-industry and multi-national trade," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 4, pages 69-94, World Scientific Publishing Co. Pte. Ltd..
    3. Bhattacharyya, Sambit & Hodler, Roland, 2010. "Natural resources, democracy and corruption," European Economic Review, Elsevier, vol. 54(4), pages 608-621, May.
    4. Fan, Joseph P.H. & Morck, Randall & Xu, Lixin Colin & Yeung, Bernard, 2009. "Institutions and Foreign Direct Investment: China versus the Rest of the World," World Development, Elsevier, vol. 37(4), pages 852-865, April.
    5. Agnès Bénassy‐Quéré & Maylis Coupet & Thierry Mayer, 2007. "Institutional Determinants of Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 30(5), pages 764-782, May.
    6. Joshua D. Angrist & Adriana D. Kugler, 2008. "Rural Windfall or a New Resource Curse? Coca, Income, and Civil Conflict in Colombia," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 191-215, May.
    7. Martijn Burger & Frank van Oort & Gert-Jan Linders, 2009. "On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-inflated Estimation," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(2), pages 167-190.
    8. Rajeev J Sawant, 2010. "The economics of large-scale infrastructure FDI: The case of project finance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(6), pages 1036-1055, August.
    9. Ligon, Ethan A. & Sadoulet, Elisabeth, 2011. "Estimating the effects of aggregate agricultural growth on the distribution of expenditures," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4435r7bm, Department of Agricultural & Resource Economics, UC Berkeley.
    10. World Bank, 2009. "Awakening Africa's Sleeping Giant : Prospects for Commercial Agriculture in the Guinea Savannah Zone and Beyond [Le réveil du géant assoupi : Perspectives de l’agriculture commerciale dans les sava," World Bank Publications - Books, The World Bank Group, number 2640.
    11. Loayza, Norman V. & Raddatz, Claudio, 2010. "The composition of growth matters for poverty alleviation," Journal of Development Economics, Elsevier, vol. 93(1), pages 137-151, September.
    12. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
    13. Raghuram G. Rajan & Rodney Ramcharan, 2011. "Land and Credit: A Study of the Political Economy of Banking in the United States in the Early 20th Century," Journal of Finance, American Finance Association, vol. 66(6), pages 1895-1931, December.
    14. Klaus Deininger, 2003. "Land Policies for Growth and Poverty Reduction," World Bank Publications - Books, The World Bank Group, number 15125.
    15. Shleifer, Andrei & Wolfenzon, Daniel, 2002. "Investor protection and equity markets," Journal of Financial Economics, Elsevier, vol. 66(1), pages 3-27, October.
    16. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    17. Eswar S. Prasad & Kenneth Rogoff & Shang-Jin Wei & M. Ayhan Kose, 2007. "Financial Globalization, Growth and Volatility in Developing Countries," NBER Chapters, in: Globalization and Poverty, pages 457-516, National Bureau of Economic Research, Inc.
    18. Deininger, Klaus & Nizalov, Denys & Singh, Sudhir K, 2013. "Are mega-farms the future of global agriculture ? exploring the farm size-productivity relationship," Policy Research Working Paper Series 6544, The World Bank.
    19. Collier Paul & Venables Anthony J., 2012. "Land Deals in Africa: Pioneers and Speculators," Journal of Globalization and Development, De Gruyter, vol. 3(1), pages 1-22, June.
    20. Papaioannou, Elias, 2009. "What drives international financial flows? Politics, institutions and other determinants," Journal of Development Economics, Elsevier, vol. 88(2), pages 269-281, March.
    21. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
    22. James R. Markusen & Anthony J. Venables, 2021. "Multinational firms and the new trade theory," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 3, pages 47-67, World Scientific Publishing Co. Pte. Ltd..
    23. Schnitzer, Monika, 1999. "Expropriation and control rights: A dynamic model of foreign direct investment," International Journal of Industrial Organization, Elsevier, vol. 17(8), pages 1113-1137, November.
    24. Nugent, Jeffrey B. & Robinson, James A., 2010. "Are factor endowments fate?," Revista de Historia Económica / Journal of Iberian and Latin American Economic History, Cambridge University Press, vol. 28(1), pages 45-82, March.
    25. Ward Anseeuw & Mathieu Boche & Thomas Breu & Markus Giger & Jann Lay & Peter Messerli & Kerstin Nolte, 2012. "Transnational land deals for agriculture in the global south," Working Papers hal-02875924, HAL.
    26. Arrunada, Benito, 2007. "Pitfalls to avoid when measuring institutions: Is Doing Business damaging business?," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 729-747, December.
    27. Mohsin Habib & Leon Zurawicki, 2002. "Corruption and Foreign Direct Investment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 291-307, June.
    28. Binswanger, Hans P. & Deininger, Klaus & Feder, Gershon, 1995. "Power, distortions, revolt and reform in agricultural land relations," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 42, pages 2659-2772, Elsevier.
    29. Derek Byerlee & Klaus Deininger, 2013. "The Rise of Large Farms in Land-Abundant Countries: Do They Have a Future?," Palgrave Macmillan Books, in: Stein T. Holden & Keijiro Otsuka & Klaus Deininger (ed.), Land Tenure Reform in Asia and Africa, chapter 14, pages 333-353, Palgrave Macmillan.
    30. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    31. Jean-Marie Baland & James A. Robinson, 2008. "Land and Power: Theory and Evidence from Chile," American Economic Review, American Economic Association, vol. 98(5), pages 1737-1765, December.
    32. Lakshmi Iyer, 2010. "Direct versus Indirect Colonial Rule in India: Long-Term Consequences," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 693-713, November.
    33. Albuquerque, Rui, 2003. "The composition of international capital flows: risk sharing through foreign direct investment," Journal of International Economics, Elsevier, vol. 61(2), pages 353-383, December.
    34. Christine Valente, 2009. "Land Reform in Developing Countries: Property Rights and Property Wrongs," Journal of Development Studies, Taylor & Francis Journals, vol. 45(10), pages 1772-1773.
    35. Manuel Oechslin, 2010. "Government Revenues and Economic Growth in Weakly Institutionalised States," Economic Journal, Royal Economic Society, vol. 120(545), pages 631-650, June.
    36. Dietrich Vollrath, 2009. "The dual economy in long-run development," Journal of Economic Growth, Springer, vol. 14(4), pages 287-312, December.
    37. Harrison, Ann (ed.), 2007. "Globalization and Poverty," National Bureau of Economic Research Books, University of Chicago Press, number 9780226318004.
    38. Daniel Kaufmann & Aart Kraay & Massimo Mastruzzi, 2004. "Governance Matters III: Governance Indicators for 1996, 1998, 2000, and 2002," The World Bank Economic Review, World Bank, vol. 18(2), pages 253-287.
    39. Klaus Deininger & Derek Byerlee & Jonathan Lindsay & Andrew Norton & Harris Selod & Mercedes Stickler, 2011. "Rising Global Interest in Farmland : Can it Yield Sustainable and Equitable Benefits?," World Bank Publications - Books, The World Bank Group, number 2263.
    40. Shang-Jin Wei, 2000. "Local Corruption and Global Capital Flows," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(2), pages 303-354.
    41. Klaus Deininger & Harris Selod & Anthony Burns, 2012. "The Land Governance Assessment Framework : Identifying and Monitoring Good Practice in the Land Sector," World Bank Publications - Books, The World Bank Group, number 2376.
    42. Gary D. Libecap & Dean Lueck, 2011. "The Demarcation of Land and the Role of Coordinating Property Institutions," Journal of Political Economy, University of Chicago Press, vol. 119(3), pages 426-467.
    43. Laura Alfaro & Sebnem Kalemli-Ozcan & Vadym Volosovych, 2008. "Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 347-368, May.
    44. Ricardo Hausmann & Federico Sturzenegger, 2007. "The missing dark matter in the wealth of nations and its implications for global imbalances [‘The US current account and the dollar’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 22(51), pages 470-518.
    45. Antonio Cabrales & Esther Hauk, 2011. "The Quality of Political Institutions and the Curse of Natural Resources," Economic Journal, Royal Economic Society, vol. 121(551), pages 58-88, March.
    46. Vollrath, Dietrich, 2009. "How important are dual economy effects for aggregate productivity?," Journal of Development Economics, Elsevier, vol. 88(2), pages 325-334, March.
    47. Derek Byerlee & Klaus Deininger, 2013. "Growing Resource Scarcity and Global Farmland Investment," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 13-34, June.
    48. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-471, June.
    49. Klaus Deininger & Denys Nizalov & Sudhir K Singh, 2013. "Are mega-farms the future of global agriculture? Exploring the farm size-productivity relationship for large commercial farms in Ukraine," Discussion Papers 49, Kyiv School of Economics.
    50. Deininger, Klaus & Feder, Gershon, 2001. "Land institutions and land markets," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 6, pages 288-331, Elsevier.
    51. Alain de Janvry & Elisabeth Sadoulet, 2010. "Agricultural Growth and Poverty Reduction: Additional Evidence," The World Bank Research Observer, World Bank, vol. 25(1), pages 1-20, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rabah Arezki & Klaus Deininger & Harris Selod, 2015. "What Drives the Global "Land Rush"?," World Bank Economic Review, World Bank Group, vol. 29(2), pages 207-233.

    More about this item

    Keywords

    WP; destination country; land governance indicator; host country characteristic; investor country variable; land governance index; origin country; Land Acquisition; Large-Scale Agriculture; Foreign Investments Agro-Ecological Potential; Land Availability; Land Governance; Property Rights; smallholder land ownership-such as Costa Rica; Food imports; Foreign direct investment; Capital flows; Land prices; Global; Sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2011/251. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.