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First-mover advantage and foreign direct investment

May 20, 2013

In a study on Algeria, it is found that foreign direct investment can be stimulated by a low price market. The drop in oil prices in Algeria in the 1990s caused budgets of national oil companies to be frustrated to the extent that oil production and exploration was hampered. Foreign investment was therefore stimulated through fiscal incentives, and foreign oil companies responded despite the low price environment, since they were keen on establishing a first mover advantage.



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