The globalization of farmland: Theory and empirical evidence
IMF | 22 June 2018

The Globalization of Farmland: Theory and Empirical Evidence

by Rabah Arezki ; Christian Bogmans ; 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.
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Source: IMF

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