Developing Global Champions: Why National Oil Companies Expand Abroad

25 Pages Posted: 17 May 2020

Multiple version iconThere are 2 versions of this paper

Date Written: November 2019

Abstract

National oil companies (NOCs) have invested hundreds of billions of dollars in foreign oil and gas assets. Why have some governments increased their NOC outward investments, while others have not? I argue that domestic structures can influence a government's calculus that potential benefits, such as added revenues and fuel supply, outweigh potential costs, such as information asymmetries and inefficiencies associated with NOCs. Nationally, partisan competition limits democratic tolerance for failures by NOCs. Bureaucratically, overlapping authority in energy policy undermines coherent NOC governance. Based on investments by NOCs hailing from 79 countries, 2000–2013, I find robust evidence for the national hypothesis.

Keywords: energy governance, energy security, foreign direct investment, national oil companies, state capitalism, state-owned enterprises

Suggested Citation

Cheon, Andrew, Developing Global Champions: Why National Oil Companies Expand Abroad (November 2019). Economics & Politics, Vol. 31, Issue 3, pp. 403-427, 2019, Available at SSRN: https://ssrn.com/abstract=3598391 or http://dx.doi.org/10.1111/ecpo.12133

Andrew Cheon (Contact Author)

Johns Hopkins SAIS ( email )

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United States

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