Natural Resources

Geoffrey Jones

in Merchants to Multinationals

Published in print March 2002 | ISBN: 9780199249992
Published online November 2003 | e-ISBN: 9780191596483 | DOI:
 Natural Resources

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This chapter discusses the large direct investments made by trading companies in the ownership of natural resources, especially commodities such as tea, sugar, rubber, and tropical timber. Asset specificity, uncertainty, and opportunism provided incentives for this backward integration, and the companies were able to use their region‐specific information and contacts to identify profitable opportunities. There are case studies of investments in tea and tropical hardwoods, and also petroleum, in which merchants were initially important, but whose capital‐intensive nature led over time to their divestment.

Keywords: asset specificity; backward integration; commodities; direct investment; natural resources; opportunism; regions; uncertainty

Chapter.  17838 words.  Illustrated.

Subjects: Economic History

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