The role of royalties in resource extraction contracts

The manner in which governments charge mineral resource producers has been the subject of considerable debate. Income-based charges such as resource rent taxes have been advocated on the theory that royalties and other output-based charges create inefficiency by distorting production decisions. Usin...

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Main Authors: CONRAD, Robert F., HOOL, Robert Bryce, NEKIPELOV, Denis
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2018
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Online Access:https://ink.library.smu.edu.sg/soe_research/2338
https://ink.library.smu.edu.sg/context/soe_research/article/3337/viewcontent/Role_of_royalties_in_resource_extraction_contracts_sv.pdf
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spelling sg-smu-ink.soe_research-33372020-01-16T09:27:22Z The role of royalties in resource extraction contracts CONRAD, Robert F. HOOL, Robert Bryce NEKIPELOV, Denis The manner in which governments charge mineral resource producers has been the subject of considerable debate. Income-based charges such as resource rent taxes have been advocated on the theory that royalties and other output-based charges create inefficiency by distorting production decisions. Using a principal-agent approach to resource contracts, separating asset ownership from asset use, we demonstrate that royalties can be efficient under conditions of certainty and also when there is uncertainty and asymmetric information. Royalties serve a key pricing purpose, signaling the marginal impact of extraction on the residual value of reserves and surrounding land or sea. 2018-08-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/soe_research/2338 info:doi/10.3368/le.94.3.340 https://ink.library.smu.edu.sg/context/soe_research/article/3337/viewcontent/Role_of_royalties_in_resource_extraction_contracts_sv.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University Public Economics
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Public Economics
spellingShingle Public Economics
CONRAD, Robert F.
HOOL, Robert Bryce
NEKIPELOV, Denis
The role of royalties in resource extraction contracts
description The manner in which governments charge mineral resource producers has been the subject of considerable debate. Income-based charges such as resource rent taxes have been advocated on the theory that royalties and other output-based charges create inefficiency by distorting production decisions. Using a principal-agent approach to resource contracts, separating asset ownership from asset use, we demonstrate that royalties can be efficient under conditions of certainty and also when there is uncertainty and asymmetric information. Royalties serve a key pricing purpose, signaling the marginal impact of extraction on the residual value of reserves and surrounding land or sea.
format text
author CONRAD, Robert F.
HOOL, Robert Bryce
NEKIPELOV, Denis
author_facet CONRAD, Robert F.
HOOL, Robert Bryce
NEKIPELOV, Denis
author_sort CONRAD, Robert F.
title The role of royalties in resource extraction contracts
title_short The role of royalties in resource extraction contracts
title_full The role of royalties in resource extraction contracts
title_fullStr The role of royalties in resource extraction contracts
title_full_unstemmed The role of royalties in resource extraction contracts
title_sort role of royalties in resource extraction contracts
publisher Institutional Knowledge at Singapore Management University
publishDate 2018
url https://ink.library.smu.edu.sg/soe_research/2338
https://ink.library.smu.edu.sg/context/soe_research/article/3337/viewcontent/Role_of_royalties_in_resource_extraction_contracts_sv.pdf
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