Expropriation risk and technology

• 成果类型: Article
• 署名作者: Opp, Marcus M.
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.08.010
• 发表日期: 2012
• 页码: 113-129
• 关键词: Expropriation risk; Foreign direct investment; dynamic contracting; property rights; Self-enforcing contracts; principal-agent models; POLITICAL RISK

摘要

This paper develops a unified framework to analyze the dynamics of firm investment in countries with poor legal enforcement. The firm's technology edge over the government generates endogenous property rights. Industry variation in the technology gap predicts a sectoral pecking-order of expropriations. Long-run investment distortions may be Pareto superior relative to persistent investment at the static optimum. The dynamics of investment and transfers depend on whether incentives (backloading) or efficiency (frontloading) concerns dominate at the initial division of surplus. An increase in government efficiency may reduce its welfare. The model provides a technology-driven rationale for the widespread use of conglomerate structures in emerging market countries. (C) 2011 Elsevier B.V. All rights reserved.