State intervention and foreign investment: Comparative study of China's and India's petroleum industries.
详细信息
文摘
Since the 1980s, China and India, within the framework of the energy security policy, opened their national petroleum industries for foreign direct investment (FDI) with the hopes of maximizing the domestic supply of crude oil. While admitting foreign economic agents, however, the leaderships of these countries shared the view that the national petroleum sectors must be kept under the strong control of the state. A two-case structural analysis demonstrates the varying degree of state intervention in adaptation of the institutional framework toward cooperation with foreign economic agents. China's devolution of economic power from the central government to the National Oil Companies allowed the latter not only to leverage FDI performance in the upstream segment of the industry, but also to extend cooperation with foreign oil majors to the domestic downstream sector and the overseas joint endeavors. India's reliance on the macro- and micromanagement functions of the central government produced regulatory inconsistencies and administrative ambiguity that restrained foreign investors from building long-term, constructive relationships with Indian counterparties.