The Globalization of Farmland : Theory and Empirical Evidence

This paper is the first to provide both theoretical and empirical evidence of farmlandglobalization whereby international investors directly acquire large tracts of agricultural landin other countries. A theoretical framework explains the geography of farmland acquisitionsas a function of cross-country differences in technology, endowments, trade costs, and landgovernance. An empirical test of the model using global data on transnational deals shows thatinternational farmland investments are on the aggregate likely motivated by re-exports toinvestor countries rather than to world markets. This contrasts with traditional foreign directinvestment patterns where horizontal as opposed to vertical FDI dominates