What Drives the Global Land Rush?

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.

Number of Pages in PDF File: 35

Keywords: land acquisition, large-scale agriculture, foreign investments agro-ecological potential, land availability, land governance, property rights

JEL Classification: F210, O130, Q150, Q340

working papers series