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Pushing One's Luck: Petroleum ownership and discoveries

Author

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  • Christa N. Brunnschweiler

    (University of East Anglia)

  • Steven Poelhekke

    (University of Auckland, Vrije Universiteit Amsterdam and Tinbergen Institute)

Abstract

Does institutional change in the petroleum sector lead to more oil and gas exploration and discoveries? Foreign ownership and investment in the sector has traditionally been unrestricted. We document that this is no longer the case; foreign-domestic partnerships are the norm today. Tracking changes in legislation between 1867 and 2008 for a panel of countries, we show that switching to foreign ownership results in more drilling and more discoveries of petroleum than domestic ownership. Switching to partnership yields even more drilling, but yields fewer discoveries. Discoveries, and the intensity and quality of exploration drilling, are endogenous to industry-specific institutional change.

Suggested Citation

  • Christa N. Brunnschweiler & Steven Poelhekke, 2019. "Pushing One's Luck: Petroleum ownership and discoveries," University of East Anglia School of Economics Working Paper Series 2019-01, School of Economics, University of East Anglia, Norwich, UK..
  • Handle: RePEc:uea:ueaeco:2019_01
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    discoveries; oil and gas; natural resources; institutions;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General

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