Resource frontiers and agglomeration economies: The varied logics of transnational land-based investing in Southern and Eastern Africa

Actor-level data on large-scale commercial agriculture in Sub-Saharan Africa are scarce. The peculiar choice of transnational investing in African land has, therefore, been subject to conjecture. Addressing this gap, we reconstructed the underlying logics of investment location choices in a Bayesian network, using firm- and actor-level interview and spatial data from 37 transnational agriculture and forestry investments across 121 sites in Mozambique, Zambia, Tanzania, and Ethiopia. We distinguish four investment locations across gradients of resource frontiers and agglomeration economies to derive the preferred locations of different investors with varied skillsets and market reach (i.e., track record). In contrast to newcomers, investors with extensive track records are more likely to expand the land use frontier, but they are also likely to survive the high transaction costs of the pre-commercial frontier. We highlight key comparative advantages of Southern and Eastern African frontiers and map the most probable categories of investment locations.

Property Rights, Village Political System, and Forestry Investment: Evidence from China’s Collective Forest Tenure Reform

To investigate the effect of improved property rights and, in particular, village democracy under China’s Collective Forest Tenure Reform (Tenure Reform) on household forestry investments, we estimate both tobit models and the more general Cragg models for farmers’ labor and monetary inputs into forestry, using survey data of 652 households from the southern collective forest region of China. The results reveal that the improved forestland use and disposition rights had a significant effect on household investments in forestry, while the beneficiary right did not. In addition, the results suggest that village democracy had a positive effect on households’ forestry investments. More importantly, we find that village democracy was able to significantly strengthen the investment incentive effect of the improved property rights under the Tenure Reform. These effects may be explained by the fact that village democracy improved households’ perception, cognition, and, subsequently, confidence toward, in particular, the use and disposition rights of the forests entitled to them. Therefore, the findings suggest that to increase the investment incentives of the Tenure Reform further, governments could strengthen the bundle of households’ use and disposition rights, as well as their related policies. Also, our findings indicate that governments could significantly improve the performance of public policies by effectively employing democratic procedures in the process of policy implementation.