Journal Article

Natural resource sector FDI, government policy, and economic growth: Quasi-experimental evidence from Liberia

Date Published

Mar 20, 2018

Authors

Jonas B. Bunte, Harsh Desai, Kanio Gbala, Bradley C. Parks, Daniel Miller Runfola

Publisher

Citation

Bunte, J. B., Desai, H., Gbala, K., Parks, B., & Runfola, D. M. (2018). Natural resource sector FDI, government policy, and economic growth: Quasi-experimental evidence from Liberia. World Development, 107, 151-162. doi:10.1016/j.worlddev.2018.02.034

Note: A version of this article was previously published as an AidData Working Paper.

Journal Article

Natural resource sector FDI, government policy, and economic growth: Quasi-experimental evidence from Liberia

Date Published

Mar 20, 2018

Authors

Jonas B. Bunte, Harsh Desai, Kanio Gbala, Bradley C. Parks, Daniel Miller Runfola

Citation

Bunte, J. B., Desai, H., Gbala, K., Parks, B., & Runfola, D. M. (2018). Natural resource sector FDI, government policy, and economic growth: Quasi-experimental evidence from Liberia. World Development, 107, 151-162. doi:10.1016/j.worlddev.2018.02.034

Governments use a variety of policies to increase the impact of foreign investment on economic growth. An increasingly popular policy is to require that foreign companies provide public goods near the communities where their commercial investments are sited. This approach seeks to crowd in additional investments, create clusters of interconnected firms, and set in motion economic agglomeration processes. Post-2006 Liberia represents an ideal empirical setting to test the effectiveness of this approach. We construct a new dataset that measures the precise locations of 557 natural resource concessions granted to investors. We then merge these data with a remotely sensed measure of nighttime light growth at the 1km x 1km grid cell level and analyze it using a matched difference-in-differences strategy. We find heterogeneous treatment effects across sectors and investor types: mining (specifically iron-ore) investments projects have positive growth effects, while agriculture and forestry investment projects do not; furthermore, concessions granted to Chinese investors have positive growth effects while those given to U.S. investors do not. These patterns of heterogeneous treatment effects across sectors and investor types are consistent with the theory of change underpinning the governmentÕs development corridor strategy.

Tags
Available on GeoQuery
TUFF
Geocoded
SDG Coded
Natural Resource Concessions
Survey Results
Metadata
Publication Date
Oct 2016
Starting Year:
2004
Ending Year:
2015
Number of Entries:
557
File Size:

This first-of-its-kind geocoded dataset contains all known natural resource concessions granted to investors in Liberia from 2004 to 2015, categorized on 43 different dimensions. The release contains 557 concession licenses sourced from both official systems and transparency initiatives in Liberia, along with additional information collected using AidData's TUFF open-source data collection methodology.