Mr. Rabah Arezki, Mr. Christian Bogmans, and Mr. Harris Selod
This paper is the first to provide both theoretical and empirical evidence of farmland
globalization whereby international investors directly acquire large tracts of agricultural land
in other countries. A theoretical framework explains the geography of farmland acquisitions
as a function of cross-country differences in technology, endowments, trade costs, and land
governance. An empirical test of the model using global data on transnational deals shows that
international farmland investments are on the aggregate likely motivated by re-exports to
investor countries rather than to world markets. This contrasts with traditional foreign direct
investment patterns where horizontal as opposed to vertical FDI dominates.
Despite the rapid increase in FDI flows to LICs, there have been relatively few studies that have specifically examined these flows. This paper attempts to partially fill the void by throwing light on one particularly dynamic aspect of global FDI-flows from Brazil, Russia, India and China (BRICs). The paper finds that official data sources undoubtedly underestimate the volume and scope of FDI flows as many small and medium-sized enterprises (SMEs) do not always register their investment. As a result, while it is difficult to estimate accurately the growth impact of BRIC FDI, there is case study evidence that it is increasingly significant. Second, while initial investment, mostly by state-owned companies, has often been destined for natural resource industries, over time, investment has been spreading to agriculture, manufacturing, and service industries (e.g., telecommunications). Third, FDI from BRICs flows into many non resource-rich countries in LICs and plays a significant role in growth in those countries.
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.