Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123440
Authors: 
Ludwig, Markus
Year of Publication: 
2012
Series/Report no.: 
WWZ Discussion Paper 2012/11
Abstract: 
Using firm-level panel data, this paper exposes differences in the dynamic oil produc- tion regime between private and state-owned firms. I find that state-owned firms reduce the oil supply, ceteris paribus, by 3.5 percent each year, but private firms hold output constant. Furthermore, state-owned firms have not followed such stringent policy before 1997. My ex- tension of the Hotelling-model attributes the behavior of state-owned firms to a scarcity rent, whereas private firms produce at their constant capacity limit, owing to possible expropriation. The theory also indicates that state-owned firms will only switch to a Hotelling-regime after a certain lag time, attributable to limited capacity. The data further reveals that contractions in the supply of state-owned oil lead to oil price increases, indicating that state-owned firms do, in fact, generate a scarcity rent. My results therefore suggest that the shift from private towards state-owned oil dominance in the 1970s gave rise to a delayed increasing oil price path.
Subjects: 
Hotelling-rent
oil supply
national firms
JEL: 
Q3
L1
Document Type: 
Working Paper

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