What Drives the Global Land Rush?

This paper studies the determinants of foreign land acquisition for large-scale agriculture. To do so, gravity models are estimated using data on bilateral investment relationships, together with newly constructed indicators of agro-ecological suitability in areas with low population density as well as indicators of land rights security. Results confirm the central role of agro-ecological potential as a pull factor. In contrast to the literature on foreign investment in general, the quality of the business climate is insignificant whereas weak land governance and tenure security for current users make countries more attractive for investors. Implications for policy are discussed.Agroindustries;Economic models;Land tenure;forest, investors, land acquisition, forest land, forest area, investor protection, forests, agricultural land, investment projects, direct investment, foreign direct investment, foreign investment, land rights, cultivated land, commodity prices, land users, expropriation, multinational firms, land reform, forest plantations, investment flows, land policy, global capital, land owners, forestry law, agricultural land use, forest sector, land quality, arable land, land clearing, land tenure security, private equity, center for international forestry research, cultivable land, forestry research, investment decisions, public investment, environmental protection, contract enforcement, forest resources, forestry industry, investment climate, land tenure systems, investment needs, international finance, rates of return, institutional investors