Taken together, this dissertation aims to provide more nuanced accounts of the causes and consequences of FDI inflows.

"My dissertation consists of three essays on the political economy of foreign investments and international business. The first essay investigates the relationship between a country's level of democracy and its ability to attract foreign direct investment (FDI). According to a well-established finding in the literature, democratic countries can attract more FDI. However, I show that this positive association between democracy and FDI disappears once I control for a selection bias in which FDI tends to come from democratic countries in the first place. I then show that it is not democracy by itself but the level of political similarity between any two countries that affects their FDI flow. In other words, democracy does not attract FDI, political similarity does. The second essay looks into how well countries absorb foreign investments after they receive those investments. I find that FDI contributes less to economic growth in more democratic countries. This result survives a long series of robustness checks, and its substantive effect is considerably larger than those of several other factors that affect growth, including market size, trade openness, development level, and inflation. While the first two essays are empirical in nature and primarily deal with politics at the macro level (i.e., between countries), the third essay is a theoretical study ofthe strategic interaction between micro-level actors (i.e., firms, activist groups) and their governments. It is, to my knowledge, the first game-theoretic model of private politics - a relatively young field - that focuses on the international dimension. I find that activist campaigns in democratic and nondemocratic countries have different characteristics due to the nature of the competition between firms and activist groups. Counterintuitively, I find that even if governments have pure economic motives - i.e., they only care about gaining investments for their countries?there still does not exist a "race to the bottom" in equilibrium, as commonly expected. Finally, I propose a novel answer to the perennial question in political science of why there is so "little" lobbying money in politics, which differs from previous explanations in that mine is the first one that is based on a competition dynamic."--Pages vi-vii.

Jakob Schwab analyzes central mechanisms in the systematic economic interaction between rich and poor countries. He focuses on the drivers and effects of investment in developing countries and shows that predictions of standard economic analysis may turn around when accounting for peculiarities of North-South globalization. The author shows how endowments with educational skill levels may lead to complementarity between trade and capital inflows, how inflows of direct investment capital may hinder income growth in poor countries, and how the distributional effects of the presence of multinational enterprises are perceived differently in countries of different development structures.

Analyzing several aspects of the political economy of international economic policy,this book contains 12 essays that address the areas of the political economy of trade, aid and investment policy, and therefore will be of interest to academic researchers and students of international economics.

Pinto develops a partisan theory of foreign direct investment (FDI) arguing that left-wing governments choose policies that allow easier entry by foreign investors more than right-wing governments, and that foreign investors prefer to invest in countries governed by the left. To reach this determination, the book derives the conditions under which investment flows should be expected to affect the relative demand for the services supplied by economic actors in host countries. Based on these expected distributive consequences, a political economy model of the regulation of FDI and changes in investment performance within countries and over time is developed. The theory is tested using both cross-national statistical analysis and two case studies exploring the development of the foreign investment regimes and their performance over the past century in Argentina and South Korea.

For decades, free trade was advocated as the vehicle for peace, prosperity, and democracy in an increasingly globalized market. More recently, the proliferation of foreign direct investment has raised questions about its impact upon local economies and politics. Here, seven scholars bring together their wide-ranging expertise to investigate the factors that determine the attractiveness of a locale to investors and the extent of their political power. Multinational corporations prefer to invest where legal and political institutions support the rule of law, protections for property rights, and democratic processes. Corporate influence on local institutions, in turn, depends upon the relative power of other players and the types of policies at issue.