Governments use a variety of policies to increase the impact of foreign investment on economic gr... more Governments use a variety of policies to increase the impact of foreign investment on economic growth. An increasingly popular policy is to require that foreign companies provide public goods near the communities where their commercial investments are sited. This approach seeks to crowd in additional investments, create clusters of interconnected firms, and set in motion economic agglomeration processes. Post-2006 Liberia represents an ideal empirical setting to test the e↵ectiveness of this approach. We construct a new dataset that measures the precise locations of 557 natural resource concessions granted to investors. We then merge these data with a remotely sensed measure of nighttime light growth at the 1 km ⇥ 1 km grid cell level and analyze it using a matched di↵erence-in-di↵erences strategy. We find heterogeneous treatment e↵ects across sectors and investor types: mining (specifically iron-ore) investments projects have positive growth e↵ects, while agriculture and forestry investment projects do not; furthermore, concessions granted to Chinese investors have positive growth e↵ects while those given to U.S. investors do not. These patterns of heterogeneous treatment e↵ects across sectors and investor types are consistent with the theory of change underpinning the government's development corridor strategy.
Governments use a variety of policies to increase the impact of foreign investment on economic gr... more Governments use a variety of policies to increase the impact of foreign investment on economic growth. An increasingly popular policy is to require that foreign companies provide public goods near the communities where their commercial investments are sited. This approach seeks to crowd in additional investments, create clusters of interconnected firms, and set in motion economic agglomeration processes. Post-2006 Liberia represents an ideal empirical setting to test the e↵ectiveness of this approach. We construct a new dataset that measures the precise locations of 557 natural resource concessions granted to investors. We then merge these data with a remotely sensed measure of nighttime light growth at the 1 km ⇥ 1 km grid cell level and analyze it using a matched di↵erence-in-di↵erences strategy. We find heterogeneous treatment e↵ects across sectors and investor types: mining (specifically iron-ore) investments projects have positive growth e↵ects, while agriculture and forestry investment projects do not; furthermore, concessions granted to Chinese investors have positive growth e↵ects while those given to U.S. investors do not. These patterns of heterogeneous treatment e↵ects across sectors and investor types are consistent with the theory of change underpinning the government's development corridor strategy.
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Papers by Kanio Gbala