The Challenge of Venezuelan Oil

Gall, Norman

doi:10.2307/1147962

Cited by 2 publications

(1 citation statement)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Pushing out foreign personnel, who were mainly in high-level positions, was not something that was common to nationalization experiences (Olmedillo (1984)), also noted earlier in Section 2. Even though proportionally most of the Venezuelan oil industry jobs were held by domestic labor, high-level positions were mostly held by foreigners, and there were limited domestic employees hired into these positions before the 1970s [Gall (1975) and Aitken and Harrison (1999)]. Domestic employees were not hired into these positions, partly because there were not enough trained domestic employees to fill these positions [Coronel (1983)].…”

Section: Discussion: Events Attitude and Policies Adopted In The Vementioning

confidence: 99%

Productivity, Nationalization, and the Role of “News”: Lessons From the 1970s

Melek

2018

Macroecon. Dynam.

View full text Add to dashboard Cite

Occurrences of an old phenomenon, the expropriation of foreign-owned property, peaked in the 1970s when virtually every significant oil-producing developing country nationalized its oil. Nationalization was again on the rise in the 2000s. Using novel data, this paper quantitatively evaluates the effects of nationalization. First, the paper finds significant productivity losses associated with nationalization in a sample of oil-producing countries. Venezuela in particular experienced a striking decline in productivity. Second, the paper presents a new channel through which nationalization affects productivity: a long-term pre-announcement can shift the composition of the workforce with a huge decline in highly skilled foreign workers and result in higher extraction and lower exploration. Guided by a quantitative dynamic partial equilibrium framework disciplined by features of the Venezuelan data, this paper then evaluates the effects of nationalization. A comparison of the simulated and time series data shows that the model can explain about 80% of the productivity pattern over 1961–1980 in the Venezuelan oil industry. Counterfactual experiments suggest that the shift in the composition of the workforce is important in accounting for the productivity pattern. Furthermore, if nationalization had been sudden, long-run losses would have been lower.

show abstract

Section: Discussion: Events Attitude and Policies Adopted In The Vementioning

confidence: 99%