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What Drives the Global Land Rush?

Author

Listed:
  • Rabah Arezki
  • Klaus Deininger
  • Harris Selod

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 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

  • Rabah Arezki & Klaus Deininger & Harris Selod, 2011. "What Drives the Global Land Rush?," CESifo Working Paper Series 3666, CESifo.
    • Handle: RePEc:ces:ceswps:_3666
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    More about this item

    Keywords

    land acquisition; large-scale agriculture; foreign investments agro-ecological potential; land availability; land governance; property rights;
    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

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