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Title: Costs and consequences of the expropriation of FDI by host governments
Authors: Duncan, Roderick
Keywords: Expropriation
Foreign direct investment
Natural resources
JEL Codes: F21
Issue Date: 2006
Abstract: There are no laws preventing a host government from seizing the capital of a foreign direct investment in its borders and then denying any compensation for the foreign investor. Why do we not see many more expropriations of investor capital by host governments? Compiling a database of expropriations within the minerals sectors of developing countries, I show that there is a cost for expropriation by a host government in the form of lower growth in the sectors of countries that expropriated in the past. It is possible to lose a bad reputation by a host government's actions after expropriation.
Institution/Association: Australian Agricultural and Resource Economics Society>2006 Conference (50th), February 8-10, Sydney, Australia
Total Pages: 16
Collections: 2006 Conference (50th), February 8-10, 2006, Sydney, Australia

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