An initiative for participatory monitoring of large scale acquisitions: Opportunities and results thus far

Increasing commercial pressures on land are provoking fundamental and far-reaching changes in the relationships between people and land. Much knowledge on land-oriented investments projects currently comes from the media. Although this provides a good starting point, lack of transparency and rapidly changing contexts mean that this is often unreliable. The International Land Coalition, in partnership with Oxfam Novib, Centre de coopération internationale en recherche agronomique pour le développement (CIRAD), University of Pretoria, Centre for Development and Environment of the University of Bern (CDE), and GIZ, started to compile an inventory of land-related investments. This project aims to better understand the extent, trends and impacts of land-related investments by supporting an ongoing and systematic stocktaking exercise of the various investment projects currently taking place worldwide. It involves a large number of organizations and individuals working in areas where land transactions are being made, and able to provide details of such investments. The project monitors land transactions in rural areas that imply a transformation of land use rights from communities and smallholders to commercial use, and are made both by domestic and foreign investors (private actors, governments, government-back private investors). The focus is on investments for food or agrofuel production, timber extraction, carbon trading, mineral extraction, conservation and tourism. A novel way of using ITC to document land acquisitions in a spatially explicit way and by using an approach called “crowdsourcing” is being developed. This approach will allow actors to share information and knowledge directly and at any time on a public platform, where it will be scrutinized in terms of reliability and cross checked with other sources. Up to now, over 1200 deals have been recorded across 96 countries. Details of such transactions have been classified in a matrix and distributed to over 350 contacts worldwide for verification. The verified information has been geo-referenced and represented in two global maps. This is an open database enabling a continued monitoring exercise and the improvement of data accuracy. More information will be released over time. The opportunities arise from overcoming constraints by incomplete information by proposing a new way of collecting, enhancing and sharing information and knowledge in a more democratic and transparent manner. The intention is to develop interactive knowledge platform where any interested person can share and access information on land deals, their link to involved stakeholders, and their embedding into a geographical context. By making use of new ICT technologies that are more and more in the reach of local stakeholders, as well as open access and web-based spatial information systems, it will become possible to create a dynamic database containing spatial explicit data. Feeding in data by a large number of stakeholders, increasingly also by means of new mobile ITC technologies, will open up new opportunities to analyse, monitor and assess highly dynamic trends of land acquisition and rural transformation.

Corporate aging and investment decisions

Paper I: Corporate aging and internal resource allocation Abstract Various observers argue that established firms are at a disadvantage in pursuing new growth opportunities. In this paper, we provide systematic evidence that established firms allocate fewer resources to high-growth lines of business. However, we find no evidence of inefficient resource allocation in established firms. Redirecting resources from high-growth to low-growth lines of business does not result in lower profitability. Also, resource allocation towards new growth opportunities does not increase when managers of established firms are exposed to takeover and product market threats. Rather, it seems that conservative resource allocation strategies are driven by pressures to meet investors’ expectations. Our empirical evidence, thus, favors the hypothesis that established firms wisely choose to allocate fewer resources to new growth opportunities as external pressures force them to focus on efficiency rather than novelty (Holmström 1989). Paper II: Corporate aging and asset sales Abstract This paper asks whether divestitures are motivated by strategic considerations about the scope of the firm’s activities. Limited managerial capacity implies that exploiting core competences becomes comparatively more attractive than exploring new growth opportunities as firms mature. Divestitures help stablished firms free management time and increase the focus on core competences. The testable implication of this attention hypothesis is that established firms are the main sellers of assets, that their divestiture activity increases when managerial capacity is scarcer, that they sell non-core activities, and that they return the divestiture proceeds to the providers of capital instead of reinvesting them in the firm. We find strong empirical support for these predictions. Paper III: Corporate aging and lobbying expenditures Abstract Creative destruction forces constantly challenge established firms, especially in competitive markets. This paper asks whether corporate lobbying is a competitive weapon of established firms to counteract the decline in rents over time. We find a statistically and economically significant positive relation between firm age and lobbying expenditures. Moreover, the documented age-effect is weaker when firms have unique products or operate in concentrated product markets. To address endogeneity, we use industry distress as an exogenous nonlegislative shock to future rents and show that established firms are relatively more likely to lobby when in distress. Finally, we provide empirical evidence that corporate lobbying efforts by established firms forestall the creative destruction process. In sum, our findings suggest that corporate lobbying is a competitive weapon of established firms to retain profitability in competitive environments.