Foreign Direct Investment in Authoritarian States

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dc.contributor.advisorAllee, Todden_US
dc.contributor.authorEnglund, Chase Colemanen_US
dc.contributor.departmentGovernment and Politicsen_US
dc.contributor.publisherDigital Repository at the University of Marylanden_US
dc.contributor.publisherUniversity of Maryland (College Park, Md.)en_US
dc.date.accessioned2024-02-14T06:30:28Z
dc.date.available2024-02-14T06:30:28Z
dc.date.issued2023en_US
dc.description.abstractIn this dissertation, I examine autocracies and demonstrate why some autocratic regimes attract considerable investment whereas others do not. I advance two primary claims. The first is that autocratic regimes in which there is political competition actually receive less FDI than those in which there is less competition. Autocratic states tend to have weak institutional protections for investors, which causes greater uncertainty for businesses that fear costly policy changes. Therefore, when political competition in autocracies is greater, investors become more cautious and FDI inflows decline. The second claim is that FDI is more targeted to certain sectors in autocratic states with less political competition. This is because autocratic leaders seek to use FDI as a private good to favor members of their winning coalition. Therefore, autocrats with smaller coalitions (i.e., less political competition) will use policy to steer the benefits of FDI more narrowly. This is important because the use of FDI as a private good in this way tends to entrench authoritarianism. In analyzing both claims, I also examine the relative number of economic elites in a state, which I argue is an important and fundamental indicator of competition over policy (alongside the political measures), because it determines the size of an autocrat’s winning coalition. I find strong support for both of these hypotheses, using a wide range of novel data that I have compiled from several unique sources and various private organizations. I examine the volume and sectoral concentration of FDI in thousands of cases involving more than 100 non-democratic states over a 42-year period, beginning in 1980. In order to measure foreign investors’ perceptions of the policy environment in nondemocratic states, I also utilize data from an automated textual analysis of quarterly earnings calls of publicly traded firms located in authoritarian settings. Even after controlling for other factors, I first find that greater political competition is associated with greater perception of risk by foreign investors and lower FDI inflows. To measure the number of economic elites relative to economic activity, I employ a novel measure of stock market concentration that estimates the degree to which a market is either oligarchic or diversified. These results are important and timely because many of the largest recipients of FDI globally are now autocratic states. This means that large segments of the global population will depend on authoritarian governance to attract FDI, which is widely considered important to global economic development. Furthermore, understanding whether or not we can expect FDI to have a democratizing impact on autocratic government is crucial to developing expectations about how FDI will shape global politics in the decades to come.en_US
dc.identifierhttps://doi.org/10.13016/ipiv-ciim
dc.identifier.urihttp://hdl.handle.net/1903/31705
dc.language.isoenen_US
dc.subject.pqcontrolledInternational relationsen_US
dc.subject.pqcontrolledEconomicsen_US
dc.subject.pquncontrolledAuthoritarianismen_US
dc.subject.pquncontrolledForeign Direct Investmenten_US
dc.subject.pquncontrolledInvestmenten_US
dc.subject.pquncontrolledPolicy uncertaintyen_US
dc.subject.pquncontrolledRisken_US
dc.titleForeign Direct Investment in Authoritarian Statesen_US
dc.typeDissertationen_US

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