Details
| Original language | English |
|---|---|
| Article number | 102268 |
| Journal | Applied geography |
| Volume | 122 |
| Early online date | 4 Aug 2020 |
| Publication status | Published - Sept 2020 |
Abstract
In recent years, an increased interest in farmland globally has led to the emergence of many land-based investment projects. Although most projects enter the production stage, a significant number also ends in failure. This paper asks why land-based investment projects fail. This is a crucial question as failed investment projects are unlikely to have any positive impacts on the host regions. I develop a conceptual framework to understand the determinants of failure and then use project-level data to empirically test these potential determinants drawing on survival analysis. I find that failure occurs globally but is concentrated on the African continent, with some countries exhibiting a particularly high risk of project failure. In addition, larger projects, projects growing agrofuels, and projects targeting land formerly used by smallholders or pastoralists are more likely to fail. In contrast, projects that involve domestic investors or take place in countries with better infrastructure are less likely to fail. The findings on the impact of host-country institutions on project failure are ambiguous and highlight the need for more localized institutional variables to better understand the role of institutions for project failure.
Keywords
- Farm survival, Land-based investments, Large-scale land acquisitions, Survival analysis
ASJC Scopus subject areas
- Agricultural and Biological Sciences(all)
- Forestry
- Social Sciences(all)
- Geography, Planning and Development
- Environmental Science(all)
- Business, Management and Accounting(all)
- Tourism, Leisure and Hospitality Management
Sustainable Development Goals
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In: Applied geography, Vol. 122, 102268, 09.2020.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Doomed to fail?
T2 - Why some land-based investment projects fail
AU - Nolte, Kerstin
N1 - Funding Information: I acknowledge funding by the European Commission - (Grant number: DCI-FOOD/2015/372-504 ) and a research stipend by the German Academic Exchange Service (DAAD) .
PY - 2020/9
Y1 - 2020/9
N2 - In recent years, an increased interest in farmland globally has led to the emergence of many land-based investment projects. Although most projects enter the production stage, a significant number also ends in failure. This paper asks why land-based investment projects fail. This is a crucial question as failed investment projects are unlikely to have any positive impacts on the host regions. I develop a conceptual framework to understand the determinants of failure and then use project-level data to empirically test these potential determinants drawing on survival analysis. I find that failure occurs globally but is concentrated on the African continent, with some countries exhibiting a particularly high risk of project failure. In addition, larger projects, projects growing agrofuels, and projects targeting land formerly used by smallholders or pastoralists are more likely to fail. In contrast, projects that involve domestic investors or take place in countries with better infrastructure are less likely to fail. The findings on the impact of host-country institutions on project failure are ambiguous and highlight the need for more localized institutional variables to better understand the role of institutions for project failure.
AB - In recent years, an increased interest in farmland globally has led to the emergence of many land-based investment projects. Although most projects enter the production stage, a significant number also ends in failure. This paper asks why land-based investment projects fail. This is a crucial question as failed investment projects are unlikely to have any positive impacts on the host regions. I develop a conceptual framework to understand the determinants of failure and then use project-level data to empirically test these potential determinants drawing on survival analysis. I find that failure occurs globally but is concentrated on the African continent, with some countries exhibiting a particularly high risk of project failure. In addition, larger projects, projects growing agrofuels, and projects targeting land formerly used by smallholders or pastoralists are more likely to fail. In contrast, projects that involve domestic investors or take place in countries with better infrastructure are less likely to fail. The findings on the impact of host-country institutions on project failure are ambiguous and highlight the need for more localized institutional variables to better understand the role of institutions for project failure.
KW - Farm survival
KW - Land-based investments
KW - Large-scale land acquisitions
KW - Survival analysis
UR - http://www.scopus.com/inward/record.url?scp=85088878068&partnerID=8YFLogxK
U2 - 10.1016/j.apgeog.2020.102268
DO - 10.1016/j.apgeog.2020.102268
M3 - Article
AN - SCOPUS:85088878068
VL - 122
JO - Applied geography
JF - Applied geography
SN - 0143-6228
M1 - 102268
ER -