Foreign Ownership, R&D and Technology Sourcing
This paper explores the relationship between domestic R&D and the inflow of foreign capital through foreign direct investment and foreign ownership. The idea that firms invest in a foreign country in order to more easily absorb the knowledge and technology of foreign firms is tested empirically using a unique firm level data set covering foreign ownership and R&D for all Norwegian firms over the period 1990 to 1996. The study gives no clear evidence supporting the existence of such a motive behind foreign ownership. On the other hand, the econometric study indicates that foreign investors may try to exploit their technological advantages in the Norwegian market. The results also show that the degree of foreign ownership is more volatile when firms are highly R&D intensive. We hypothesize that this is due to the fact that large R&D investments often result in large losses as well as gains to the firms.
Elite perceptions of ethical problems facing the Western oil industry in Azerbaijan
This is a study of the Azerbaijani political elite’s perceptions of Western oil companies and their contribution to – or hindrance of – the development of democracy and human rights. Twenty oppositional figures, including most of the party leaders and presidential candidates, plus some media, NGO and academic personalities, were subjected to an in-depth interview. There was a consensus that the Western oil industry was at best irrelevant and at worst inimical to the cause of democracy and human rights in Azerbaijan. This is because short-term commercial considerations have led it to kowtow to the dictatorship, ignore the political opposition and boycott the free media. There is also pay discrimination against Azerbaijani labour. Above all, it was almost universally agreed that the Western oil industry is aggravating the corruption of Azerbaijani life. Nobody thought Statoil worse than the other foreign oil companies, but only a minority thought it better. The result of this undesirable behaviour is likely to be the severe displeasure of any new government based on the current political opposition, which may prefer Japanese and Chinese investment. At worst, the population’s acute disillusionment with the West and the social misery caused by corruption and mismanagement may override Azerbaijan’s secular and moderate traditions and bring about an Islamic Republic. The elite makes many suggestions for what the Western oil companies can and should do to improve the situation: such as not being bluffed by the president, insisting on transparent accounting, cultivating alternative centres of power, facilitating scientific, educational and cultural exchange and supporting the Azerbaijani cause in the Nagorno-Karabakh conflict.
Corruption in former USSR countries and international oil business in Azerbaijan
This research report presents an analysis of corruption in Azerbaijan. We have mainly relied on secondary sources. Since data on observed corruption are scarce and unsystematic, we had to give much emphasis on background data that have important impact on corruption levels in general and for which quantitative observations exist: The relative size of the underground economy, the rate of tax collection and the degree of poverty. We draw background data from a sample of countries that belonged to the former Soviet Union, the FSU countries. The countries chosen we consider to be the most relevant for a study of corruption in Azerbaijan, either because they are the largest among the FSU countries or because they are at similar economic level as Azerbaijan, share borders or language. Practical considerations, such as available statistics also play a role.