Navigating troubled waters? Foreign investors and the resource rent tax on aquaculture

Abstract

This thesis examines the impact of the resource rent taxation introduced on Norwegian aquaculture in 2022, to analyze the effects on foreign ownership in the sector following its implementation. Designed to capture excess profits derived from shared natural resources, the resource rent tax is a topic of significant interest to investors, policymakers, and industry stakeholders. This study investigates whether, and to what extent, the resource rent tax has influenced ownership structures in companies within the Norwegian aquaculture sector, focusing on foreign investors. Using a Synthetic Difference-in-Differences approach, ownership trends are analyzed to identify potential changes resulting from the resource rent tax's implementation.

The findings show that the resource rent tax has not significantly influenced foreign ownership in the Norwegian aquaculture sector, contrary to the original hypothesis. This result may reflect delayed effects, an overestimation of the expected increase in political risk, or other mitigating factors. To better understand these results, further analyses were performed with additional adjustments to strengthen the robustness. These efforts aim to provide a more comprehensive understanding of the factors contributing to the findings.

This thesis explores the challenges of evaluating the impact of taxation policies on investment behavior. By incorporating concepts such as political risk, home bias, and cost of capital, while addressing the specific features of the Norwegian aquaculture sector, it aims to provide valuable insights for policymakers and stakeholders. The study underscores the importance of careful policy design and transparent communication to maintain investor confidence and support sustainable resource management in the sector.

This thesis examines the impact of the resource rent taxation introduced on Norwegian aquaculture in 2022, to analyze the effects on foreign ownership in the sector following its implementation. Designed to capture excess profits derived from shared natural resources, the resource rent tax is a topic of significant interest to investors, policymakers, and industry stakeholders. This study investigates whether, and to what extent, the resource rent tax has influenced ownership structures in companies within the Norwegian aquaculture sector, focusing on foreign investors. Using a Synthetic Difference-in-Differences approach, ownership trends are analyzed to identify potential changes resulting from the resource rent tax's implementation.

The findings show that the resource rent tax has not significantly influenced foreign ownership in the Norwegian aquaculture sector, contrary to the original hypothesis. This result may reflect delayed effects, an overestimation of the expected increase in political risk, or other mitigating factors. To better understand these results, further analyses were performed with additional adjustments to strengthen the robustness. These efforts aim to provide a more comprehensive understanding of the factors contributing to the findings.

This thesis explores the challenges of evaluating the impact of taxation policies on investment behavior. By incorporating concepts such as political risk, home bias, and cost of capital, while addressing the specific features of the Norwegian aquaculture sector, it aims to provide valuable insights for policymakers and stakeholders. The study underscores the importance of careful policy design and transparent communication to maintain investor confidence and support sustainable resource management in the sector.