IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v76y2022ics0301420722000484.html
   My bibliography  Save this article

Precision policies and local content targets in resource-rich developing countries: The case of the oil and gas sector in Mozambique

Author

Listed:
  • Arena, Marika
  • Azzone, Giovanni
  • Dell’Agostino, Laura
  • Scotti, Francesco

Abstract

This paper aims to understand whether and to what extent firm-level data can “precisely” support the definition of Local Content (LC) targets for international oil and gas companies in resource-rich developing countries. The paper addresses this topic with reference to a specific, publicly available dataset developed by the World Bank Enterprises Survey (ES) Unit and uses the case of Mozambique to demonstrate the informative potential of firm-level data for policy-making. Specifically, we compare the LC estimates obtained using firm-level data with those obtained using sector-level data (input-output tables). Based on this comparison, we demonstrate that firm-level data provide a more accurate representation of the capability of the domestic supply chain to provide inputs to the oil and gas industry, while input-output tables lead to a significant overestimation of LC. Overall, our findings suggest that firm-level data can provide a more precise basis for supporting the design of LC policies and the Enterprise Survey for Mozambique could represent a reference model for data collection to be extended to other resource-rich developing countries to support target definition.

Suggested Citation

  • Arena, Marika & Azzone, Giovanni & Dell’Agostino, Laura & Scotti, Francesco, 2022. "Precision policies and local content targets in resource-rich developing countries: The case of the oil and gas sector in Mozambique," Resources Policy, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:jrpoli:v:76:y:2022:i:c:s0301420722000484
    DOI: 10.1016/j.resourpol.2022.102597
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420722000484
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2022.102597?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Alan R. Roe, 2018. "Mozambique—bust before boom: Reflections on investment surges and new gas," WIDER Working Paper Series wp-2018-140, World Institute for Development Economic Research (UNU-WIDER).
    2. Serajuddin,Umar & Uematsu,Hiroki & Wieser,Christina & Yoshida,Nobuo & Dabalen,Andrew L., 2015. "Data deprivation : another deprivation to end," Policy Research Working Paper Series 7252, The World Bank.
    3. Azzone, Giovanni, 2018. "Big data and public policies: Opportunities and challenges," Statistics & Probability Letters, Elsevier, vol. 136(C), pages 116-120.
    4. Ovadia, Jesse Salah, 2016. "Local content policies and petro-development in Sub-Saharan Africa: A comparative analysis," Resources Policy, Elsevier, vol. 49(C), pages 20-30.
    5. Rui, Zhenhua & Cui, Kehang & Wang, Xiaoqing & Chun, Jung-Hoon & Li, Yuwei & Zhang, Zhien & Lu, Jun & Chen, Gang & Zhou, Xiyu & Patil, Shirish, 2018. "A comprehensive investigation on performance of oil and gas development in Nigeria: Technical and non-technical analyses," Energy, Elsevier, vol. 158(C), pages 666-680.
    6. Silvana Tordo & Michael Warner & Osmel E. Manzano & Yahya Anouti, 2013. "Local Content in the Oil and Gas Sector," World Bank Publications - Books, The World Bank Group, number 15930.
    7. Ivar Kolstad & Abel Kinyondo, 2017. "Alternatives to local content requirements in resource-rich countries," Oxford Development Studies, Taylor & Francis Journals, vol. 45(4), pages 409-423, October.
    8. Dennis Nchor & Tomáš Konderla, 2016. "Economic Multipliers and Sectoral Linkages: Ghana and the New Oil Sector," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(2), pages 635-642.
    9. Susan Stone & James Messent & Dorothee Flaig, 2015. "Emerging Policy Issues: Localisation Barriers to Trade," OECD Trade Policy Papers 180, OECD Publishing.
    10. Adewuyi, Adeolu O. & Ademola Oyejide, T., 2012. "Determinants of backward linkages of oil and gas industry in the Nigerian economy," Resources Policy, Elsevier, vol. 37(4), pages 452-460.
    11. Teka, Zeferino, 2012. "Linkages to manufacturing in the resource sector: The case of the Angolan oil and gas industry," Resources Policy, Elsevier, vol. 37(4), pages 461-467.
    12. Adedeji, Abdulkabir Niran & Sidique, Shaufique Fahmi & Rahman, Azmawani Abd & Law, Siong Hook, 2016. "The role of local content policy in local value creation in Nigeria's oil industry: A structural equation modeling (SEM) approach," Resources Policy, Elsevier, vol. 49(C), pages 61-73.
    13. Kalyuzhnova, Yelena & Belitski, Maksim, 2019. "The impact of corruption and local content policy in on firm performance: Evidence from Kazakhstan," Resources Policy, Elsevier, vol. 61(C), pages 67-76.
    14. Manfred Lenzen & Daniel Moran & Keiichiro Kanemoto & Arne Geschke, 2013. "Building Eora: A Global Multi-Region Input-Output Database At High Country And Sector Resolution," Economic Systems Research, Taylor & Francis Journals, vol. 25(1), pages 20-49, March.
    15. Klueh, Ulrich H. & Pastor, Gonzalo & Segura, Alonso, 2009. "Policies to improve the local impact from hydrocarbon extraction: Observations on West Africa and possible lessons for Central Asia," Energy Policy, Elsevier, vol. 37(3), pages 1128-1144, March.
    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. Weldegiorgis, Fitsum S. & Dietsche, Evelyn & Franks, Daniel M., 2021. "Building mining's economic linkages: A critical review of local content policy theory," Resources Policy, Elsevier, vol. 74(C).
    2. Issabayev, Murat & Rizvanoghlu, Islam, 2019. "Optimal choice between local content requirement and fiscal policy in extractive industries: A theoretical analysis," Resources Policy, Elsevier, vol. 60(C), pages 1-8.
    3. Kalyuzhnova, Yelena & Azhgaliyeva, Dina & Belitski, Maksim, 2022. "Public Policy Instruments for Procurement: An Empirical Analysis," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    4. Macatangay, Rafael Emmanuel “Manny”, 2016. "Optimal local content requirement policies for extractive industries," Resources Policy, Elsevier, vol. 50(C), pages 244-252.
    5. Lebdioui, Amir, 2022. "The political economy of moving up in global value chains: how Malaysia added value to its natural resources through industrial policy," LSE Research Online Documents on Economics 107523, London School of Economics and Political Science, LSE Library.
    6. Mia Ellis & Margaret McMillan, 2018. "Optimal local content for extractive industries: How can policies best create benefits for Tanzania?," WIDER Working Paper Series 133, World Institute for Development Economic Research (UNU-WIDER).
    7. Mia Ellis & Margaret McMillan, 2018. "Optimal local content for extractive industries: How can policies best create benefits for Tanzania?," WIDER Working Paper Series wp-2018-133, World Institute for Development Economic Research (UNU-WIDER).
    8. Kimiagari, Salman & Mahbobi, Mohammad & Toolsee, Tushika, 2023. "Attracting and retaining FDI: Africa gas and oil sector," Resources Policy, Elsevier, vol. 80(C).
    9. Kegomoditswe Koitsiwe & Tsuyoshi Adachi, 2017. "Linkages between mining and non-mining sectors in Botswana," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 30(2), pages 95-105, July.
    10. Vincent Géronimi & Claire Mainguy, 2020. "Exploitation minière et développement : des effets toujours controversés. Introduction," Mondes en développement, De Boeck Université, vol. 0(1), pages 7-29.
    11. Gbadago, Frank Yao & Enu-Kwesi, Francis & Agyei, Samuel Kwaku & Garchie, John Gatsi, 2024. "Effects of operators’ strategic approach to local content and in-country spending requirements on financial performance of upstream petroleum sector firms, Ghana," Resources Policy, Elsevier, vol. 93(C).
    12. Guevara, Zeus & Sebastian, Antonio & Carranza Dumon, Fabian, 2022. "Economy-wide impact of conventional development policies in oil-exporting developing countries: The case of Mexico," Energy Policy, Elsevier, vol. 161(C).
    13. Obaya, Martín & López, Andrés & Pascuini, Paulo, 2021. "Curb your enthusiasm. Challenges to the development of lithium-based linkages in Argentina," Resources Policy, Elsevier, vol. 70(C).
    14. Elkhan Richard Sadik-Zada & Wilhelm Loewenstein & Yadulla Hasanli, 2021. "Production linkages and dynamic fiscal employment effects of the extractive industries: input-output and nonlinear ARDL analyses of Azerbaijani economy," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 34(1), pages 3-18, April.
    15. Nwankwo, Ebuka & Iyeke, Solomon, 2022. "Analysing the impact of oil and gas local content laws on engineering development and the GDP of Nigeria," Energy Policy, Elsevier, vol. 163(C).
    16. Mancini, Lorenzo & Paz, María José, 2018. "Oil sector and technological development: Effects of the mandatory research and development (R&D) investment clause on oil companies in Brazil," Resources Policy, Elsevier, vol. 58(C), pages 131-143.
    17. Adedeji, Abdulkabir Niran & Sidique, Shaufique Fahmi & Rahman, Azmawani Abd & Law, Siong Hook, 2016. "The role of local content policy in local value creation in Nigeria's oil industry: A structural equation modeling (SEM) approach," Resources Policy, Elsevier, vol. 49(C), pages 61-73.
    18. Boire, Sidiki & Nell, Kevin S., 2021. "The enclave hypothesis and Dutch disease effect: A critical appraisal of Mali's gold mining industry," Resources Policy, Elsevier, vol. 74(C).
    19. Jack Pegram & Gioia Falcone & Athanasios Kolios, 2019. "Quantitative and Qualitative Assessment of Job Role Localization in the Oil and Gas Industry: Global Experiences and National Differences," Energies, MDPI, vol. 12(6), pages 1-22, March.
    20. Jack Pegram & Gioia Falcone & Athanasios Kolios, 2018. "A Review of Job Role Localization in the Oil and Gas Industry," Energies, MDPI, vol. 11(10), pages 1-18, October.

    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:eee:jrpoli:v:76:y:2022:i:c:s0301420722000484. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    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.