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Investment Drivers in a Fishery with Tradable Quotas

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  • Linda Nøstbakken

Abstract

I analyze drivers of investment in a fishery with tradable quotas. Theory predicts that tradable quotas increase efficiency because efficient firms buy quotas from less efficient firms. I identify what drives investment, using data on Norwegian purse seiners. Results show that while the basic economic investment model explains investment within firms, it does not explain differences between firms. These differences are explained by other firm-specific factors such as geographical location, whether it is a family firm, and prices paid for quotas. Consequently, investment strategies are not necessarily driven by efficiency considerations, and quota trade may not increase allocative efficiency.

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  • Linda Nøstbakken, 2012. "Investment Drivers in a Fishery with Tradable Quotas," Land Economics, University of Wisconsin Press, vol. 88(2), pages 400-424.
    • Handle: RePEc:uwp:landec:v:88:y:2012:ii:1:p:400-424
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    Cited by:

    1. Nils-Arne Ekerhovd & Daniel V. Gordon, 2020. "Profitability, Capacity and Productivity Trends in an Evolving Rights Based Fishery: The Norwegian Purse Seine Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 565-591, November.
    2. Hans Frost & Peder Andersen & Ayoe Hoff, 2013. "Management of Complex Fisheries: Lessons Learned from a Simulation Model," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 61(2), pages 283-307, June.
    3. Keita Abe & Linda Nøstbakken & Mads Fjeld Wold, 2024. "Quota Consolidation in Norwegian Coastal Fisheries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(5), pages 1295-1326, May.
    4. Asche, Frank & Bjørndal, Marianne Tranberg & Bjørndal, Trond, 2014. "Development in fleet fishing capacity in rights based fisheries," Marine Policy, Elsevier, vol. 44(C), pages 166-171.

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    More about this item

    JEL classification:

    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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