THE VALUE OF STATE-BUSINESS CONNECTION IN THE POLITICS OF CROSS-BORDER CAPITAL
This dissertation demonstrates that in a highly integrated global economy, state-business relationships have significant value for cross-border investors. The first paper shows that the governments of developed countries establish international investment agreements to protect their firms’ existing international investments. The second paper reveals that these home-country governments further support their firms’ international investments by supplying them with financing through state financial institutions. The third paper builds on the assumption that political relationships increase corporate value; therefore, domestic portfolio stock investors, unlike their foreign counterparts, are able to increase their returns by investing in politically-connected firms. The broad lesson from this series of papers is that governments can increase their firms’ profits abroad and that such increases are experienced primarily by the largest firms.