Sovereign Theft: Theory and Evidence about Sovereign Default and Expropriation

Tomz, Michael; Wright, Mark L. J.

doi:10.7551/mitpress/9780262013796.003.0004

Cited by 39 publications

(33 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…We note that in all six models in Table 1, countries under any IMF program are much less likely to nationalize MNCs and such results are all 23 We also examined whether the likelihood of expropriation increases within 5 years of a default on foreign bond debts. Similar to Tomz and Wright (2010), we find that there is little correlation between default events and the likelihood of expropriation. We also tested an interaction term between IMF loan agreements and bond default and again the results are not statistically significant.…”

Section: Resultssupporting

confidence: 63%

The effects of the IMF on expropriation of foreign firms

2015

View full text Add to dashboard Cite

This paper seeks to explain the determinants of foreign expropriation in the developing world. We argue that the International Monetary Fund (IMF) helps to reduce the likelihood of nationalization because of the direct leverage the Fund holds over borrowers, especially as expropriation is a blatant violation of international property rights. Using expropriation data from 1961 to 2006, and several different measures for the Fund, we find that countries under IMF agreements are less likely to nationalize foreign firms. We also show that the Fund's influence is greatest when the IMF loan represents a larger share of the borrower country's gross domestic product (GDP) as well as in countries with weaker political institutions. The takeaway is that IMF continues to influence policy choices in the developing world.

show abstract

Section: Resultssupporting

confidence: 63%

The effects of the IMF on expropriation of foreign firms

2015

View full text Add to dashboard Cite

show abstract

“…25 In any case, anecdotal evidence about the relationship between defaults and expropriation risk is not conclusive. Tomz and Wright (2008) provide historical evidence that expropriation and defaults have not coincided over time while Aguiar et al (2009) mention that after Argentinean default in 2001 measures of expropriation deteriorated sharply. Also, in an attempt to lower the probability that our coefficient is contaminated by these considerations we include institutional and political variables in our regressions.…”

Section: Effects Of Defaults On Fdimentioning

confidence: 98%

Sovereign defaulters: Do international capital markets punish them?

Fuentes¹,

Saravia²

2010

Journal of Development Economics

View full text Add to dashboard Cite

JEL Codes: F30 F34 Keywords: Sovereign default Sovereign debt Foreign direct investment Debt repaymentWe empirically study whether countries that default on their debt experience a reduction in their capital inflows, as suggested by the literature. Our data contain information on (i) the defaulter countries and their creditors and (ii) bilateral foreign direct investment (FDI) flows. With these we can study how FDI flows are affected by sovereign default by distinguishing between those flows coming from defaulters' creditor countries and others. According to our estimations, this distinction is crucial since the decline of FDI in flows after default is markedly concentrated on those flows originating in defaulters' creditor countries. The decay in FDI flows is higher in the years closer to the default date and for countries that have defaulted more times. We do not find evidence that countries shut their doors to defaulters' investment abroad, which is also a cost of default suggested in the literature.

show abstract

“…This is in line with the standard assumptions of many formal models of expropriation. (See, for instance, Eaton and Gersovitz 1984;Cole and English 1991;Thomas and Worrall 1994;Tomz and Wright 2010. ) …”

Section: Sectoral Patternsmentioning

confidence: 99%

“…The practical considerations making it the least imperfect measure of expropriation are discussed in Sect. 2.3 Tomz and Wright (2010) have recently constructed similar data for the 1900-1960 period, although we do not include this earlier period in our main analysis. 4 Based on the relatively narrow definition of expropriation employed inKobrin (1980Kobrin ( , 1984, expropriations are documented in 76 developing countries during the 1970s alone.…”

mentioning

confidence: 97%

“…9 The data also distinguish between 'mass' and 'selective' expropriations, and 6 Minor (1994) extends Kobrin's data to include the 1980-1992 period. More recently, Tomz and Wright (2010) have extended these data backward to cover the period 1900-1960. We document expropriations from 1993 to 2006, including 3 cases during the 1989-1992 period apparently missed by Minor.…”

mentioning

confidence: 99%

See 1 more Smart Citation

Expropriation of foreign direct investments: sectoral patterns from 1993 to 2006

Hajzler

2011

Rev World Econ

View full text Add to dashboard Cite

This paper documents expropriation of foreign direct investment (FDI) across all developing countries for the 1993-2006 period, extending data constructed for earlier decades. This unique data set on worldwide expropriation between 1960 and 2006 is used to highlight several (interrelated) stylized facts. First, although expropriations have become less frequent compared to the 1970s, the number of takings has risen since the mid-1990s. Second, foreign firms are more vulnerable to expropriation in resource-based sectors, particularly in mining and petroleum. Third, the timing of expropriation coincides with fluctuations in mineral output price levels. Finally, when newly constructed FDI stock estimates are used to compare the sectoral distribution of FDI of recent expropriating countries to that of non-expropriating countries, average resource-based FDI shares are higher in expropriating countries; however, this difference is not reflected in higher value added shares for the expropriating group. This last fact is puzzling given that natural resource-based FDI has traditionally been considered high risk.

show abstract

Sovereign Theft: Theory and Evidence about Sovereign Default and Expropriation

Cited by 39 publications

References 26 publications

The effects of the IMF on expropriation of foreign firms

The effects of the IMF on expropriation of foreign firms

Sovereign defaulters: Do international capital markets punish them?

Expropriation of foreign direct investments: sectoral patterns from 1993 to 2006

Contact Info

Product

Resources

About