Foreign Land Acquisitions and Institutional Distance

Abstract

This paper investigates whether and how the distance in institutional quality between investing and target country affects the pattern of foreign land acquisitions. We estimate a panel gravity-like equation to assess the impact of the institutional distance on the amount of land acquired and the number of contracts signed. Our results show that the institutional distance significantly affects both the number of contracts and the amount of land, but that the direction of these effects varies according to the geographical region and the relative strength of institutions in the target countries, with Africa following a pattern of its own. (JEL Q15)