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Author: Trung A.. Dang Publisher: ISBN: Category : Democracy Languages : en Pages : 87
Book Description
"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.
Author: Trung A.. Dang Publisher: ISBN: Category : Democracy Languages : en Pages : 87
Book Description
"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.
Author: Calvin Thrall Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
A long-underappreciated fact in the field of international political economy is that, while states are the actors who create international political institutions, it is often nonstate actors—particularly firms—who are most directly affected by them. As firms' operations have become increasingly global over the course of the last five decades, international institutions such as economic treaties have become increasingly important for firms' bottom lines. Theorizing from the corporate perspective, this project details three strategies by which firms influence and engage with international institutions: first, by lobbying for the creation of favorable institutions; second, by shifting their legal forms in order to gain access to new institutions; and third, by cooperating with international institutions to govern their own operations (when it is profitable to do so). In the first essay, I study the role of multinational firms in the development of international institutions. Over the course of the 20th century, states have developed large networks of bilateral or small-group economic treaties in several issue areas. These treaties, which are important tools of foreign economic policy, redistribute the gains and losses of globalization. Why do states sign treaties with some partners and not others? Motivated by the observation that the same pairs of states tend to sign multiple treaties within a short time period, I develop a theory of treaty regime coevolution that centers corporate demand for treaties. Firms expand into new foreign markets in search of profit, paying fixed costs to do so. However, once the initial cost is paid, these firms become the primary beneficiaries of any future treaty between home and host states. Incumbent firms therefore have incentive to lobby home state legislators and diplomats in favor of signing treaties with their host states, across several issue areas. Strong private sector demand can lead to the formation of multiple types of treaties between pairs of states, creating firm-driven interdependence across treaty networks. Using quantitative and qualitative data—including novel data from the USSR, declassified diplomatic cables, and elite interviews—I find support for my theory. The results have implications for the decline of multilateralism in foreign policy, and suggest new avenues for studying the effects of treaties. In the second essay, I study a case in which overlap between international institutions generated opportunites for corporate arbitrage. Multinational firms frequently route their foreign investments through intermediate shell companies. Increasingly, firms engage in proxy arbitration, using these shell companies to access other states' bilateral investment treaties and file investor-state disputes against their host states. I argue that proxy arbitration is actually a spillover effect of corporate tax avoidance. Firms invest abroad through intermediate shell companies to access the bilateral tax treaty network, reducing their withholding taxes. Because the tax and investment treaty networks overlap extensively, these "tax-planning" firms often gain investment treaty coverage as a side benefit, enabling them to file proxy arbitration in the event of a dispute. Using novel, fine-grained data on the ownership structures of multinational firms, I find evidence in support of the spillover effects theory. The results suggest that understanding the true effects of global governance institutions requires attention to how firms strategically change their legal forms to access or avoid them. Finally, in the third essay, I ask whether or not firms can cooperate with international institutions in a way that produces normatively positive outcomes. Multinational firms operate in multiple national jurisdictions, making them difficult for any one government to regulate. For this reason much of the regulation of multinational firms is done by the firms themselves, increasingly in conjunction with international organizations by way of public-private governance initiatives. Prior research has claimed that such initiatives are too weak to meaningfully change firms' behavior. Can public-private governance initiatives help firms self-regulate, even if they lack strong monitoring or enforcement mechanisms? I take two steps towards answering this question. First, I introduce a new measure of firms' performance on ESG (environmental, social, and governance) issues: the extent to which the firms issue public responses to claims of misconduct from civil society actors. Second, I argue that public-private governance initiatives allow firms to benefit from the legitimacy of their public partners, lowering the reputational cost of transparent response. Employing novel data on firm responses to human rights allegations from the Business and Human Rights Resource Center, I find that membership in the largest and most prominent initiative, the United Nations Global Compact, significantly increases firms' propensity to respond transparently to stakeholder allegations. These results suggest a limited but important role for public-private initiatives in global governance
Author: John Stockmann Firth Publisher: ISBN: Category : Languages : en Pages : 194
Book Description
This thesis comprises three essays in empirical development economics. Broadly, the essays provide causal evidence on the effects of various barriers to trade, associated with infrastructure, law, and politics. Chapter 1 begins from the observation that transportation networks worldwide suffer from heavy congestion. To measure this congestion’s effect on the production side of the economy, I combine firm survey data with traffic data from Indian Railways. Geographic variation in congestion comes from a recent wave of passenger trains which were planned according to certain rigid rules, making it possible to identify the costs the additional traffic imposes on firms using the railways to ship goods. In estimating this “congestion externality”, the empirical strategy accounts for both direct and spillover effects of congestion. It also draws on a traffic model from operations research to disentangle a mean effect (congestion makes the average shipment slower) from a variance effect (congestion makes shipping times less predictable). In response especially to the unpredictability, firms simplify operations in several ways, leading to lower productivity and substantial revenue loss. While affected firms suffer, however, I draw on a general equilibrium model of competition to identify gains to their competitors. Policy implications of these results concern both the management of traffic on existing infrastructure, and the construction of new infrastructure. Chapter 2 (coauthored with Ernest Liu) provides a long-run perspective on the effects of trade costs on the geography of production. We consider India’s Freight Equalization Scheme (FES), which aimed to promote even industrial development by subsidizing long-distance transport of key inputs such as iron and steel. Many observers speculate that FES actually exacerbated inequality by allowing rich manufacturing centers on the coast to cheaply source raw materials from poor eastern regions. We exploit state-by-industry variation in the effects of FES on input costs, in order to show how it affected the geography of production. We find, first, that over the long-run FES contributed to the decline of industry in eastern India, pushing iron and steel using industries toward more prosperous states. This effect sinks in gradually, however, with the time needed to construct new plants serving as a friction to industry relocation. Finally, we test for the stickiness of these effects, by studying the repeal of FES. Contrary to popular opinions of the policy and to agglomeration-based reasons for hypothesizing stickiness, we find that the effects of repealing FES are equal and opposite to those of its implementation. Still, due to changing locations of the processing of basic iron and steel materials, the resource-rich states suffering under FES never fully recover. Chapter 3 contributes to the debate on laws against foreign bribery. When governments pass laws to prevent their businesspeople from bribing foreign officials, how does this affect patterns of trade and foreign investment? A literature focusing on the OECD Anti-Bribery Convention claims that these laws direct international business toward less corrupt destination countries, with the effect of diverting business away from developing countries. I rebut this claim, using three empirical tests: (i) a baseline test building on previous work but accounting for the omitted role of OECDlevel cooperation trends, (ii) an analysis of an initiative intensifying the Convention’s enforcement, and (iii) a test exploiting product-by-destination level variation in pre- Convention exposure to OECD exports. Together, these tests show that the redirection of trade and investment following the passage of the foreign bribery laws was due not to the laws themselves, but to an underlying trend of increased political cooperation among OECD countries, as indicated by patterns in UN voting affinity. This cooperation is what simultaneously led OECD countries to pass measures such as the Convention, and to do more business with other OECD countries, which happen to be less corrupt on average than non-OECD countries.
Author: Martin Shubik Publisher: MIT Press ISBN: 9780262693110 Category : Business & Economics Languages : en Pages : 472
Book Description
This first volume in a three-volume exposition of Shubik's vision of "mathematical institutional economics" explores a one-period approach to economic exchange with money, debt, and bankruptcy. This is the first volume in a three-volume exposition of Martin Shubik's vision of "mathematical institutional economics"--a term he coined in 1959 to describe the theoretical underpinnings needed for the construction of an economic dynamics. The goal is to develop a process-oriented theory of money and financial institutions that reconciles micro- and macroeconomics, using as a prime tool the theory of games in strategic and extensive form. The approach involves a search for minimal financial institutions that appear as a logical, technological, and institutional necessity, as part of the "rules of the game." Money and financial institutions are assumed to be the basic elements of the network that transmits the sociopolitical imperatives to the economy. Volume 1 deals with a one-period approach to economic exchange with money, debt, and bankruptcy. Volume 2 explores the new economic features that arise when we consider multi-period finite and infinite horizon economies. Volume 3 will consider the specific role of financial institutions and government, and formulate the economic financial control problem linking micro- and macroeconomics.
Author: Jeffry A Frieden Publisher: Routledge ISBN: 0429967446 Category : Political Science Languages : en Pages : 369
Book Description
This is a reader that applies the newest debates in political economy to the analysis of Latin America in a way that is thematically and theoretically cohesive.. Modern Political Economy and Latin America consists of carefully selected, edited readings in Latin American political economy. The editors, Jeffry Frieden and Manuel Pastor, Jr., include an introductory chapter, and a concluding article as well as brief introductions to all sections. These inclusions will make explicit the theoretical underpinnings of each article, and will highlight their respective contributions to the ongoing debates in Latin America. } Modern Political Economy and Latin America consists of carefully selected, edited readings in Latin American political economy. The editors, Jeffry Frieden and Manuel Pastor, Jr., include an introductory chapter, and a concluding article as well as brief introductions to all sections. These inclusions will make explicit the theoretical underpinnings of each article, and will highlight their respective contributions to the ongoing debates in Latin America.Latin American economies are undergoing profound transformations. And, in the wake of a decade-long debt crisis, the statist models of the past are giving way to a reliance on the market even as authoritarian rule seems to have ebbed in favor of new or reborn democratic institutions. As a result, the policy framework guiding economic and political development is likely to be fundamentally different. The analysis of Latin America needs a strong dose of modern political economy--one that can bring the area studies field up to date with the recent developments on the theoretical end of the economics and political science professions. This book helps fill that need. }
Author: John Adams Publisher: Springer Science & Business Media ISBN: 9400918208 Category : Business & Economics Languages : en Pages : 260
Book Description
This book is the outgrowth of the editors' conviction that there is a need for a current and comprehensive examination of international economic issues within the framework of institutional economics. The volume covers the most important international topics that institutional economists historically have addressed. We hope that our initiative and necessarily limited choice of subjects will encourage additional applications of institutional economic theory to the international economy. For other economists, the analyses contained in the volume's dozen chapters afford an opportunity to become more aware of the theoretical work and policy recommendations of institutional economists. It may be surprising that, to an extent, evolutionary and neoclassical thinking converge and even sometimes overlap on the matter of trends and problems of the international economy. A case in point is the increased attention both schools devote to the role of technology in shaping patterns of world trade and specialization. In the past few decades, global shifts in comparative advantages, the widespread adoption of more flexible exchange rate systems, and the remarkable shifts in institutional arrangements and policy regimes in the former Soviet Union and East Asia have compelled a reassessment of conventional static trade theories based on neoclassical assumptions. Links among trade, international investment, and the diffusion of economic growth are being more closely scrutinized and better understood. This volume is an effort to expand and stimulate this discourse on the economics of international relations, including global economic development.
Author: Trung A.. Dang
Author: Trung A.. Dang
Author: Calvin Thrall
Author: Yong Wang
Author: John Stockmann Firth
Author: Martin Shubik
Author: Jeffry A Frieden
Author: Frédéric Bastiat
Author: Krishna Srinivasan
Author: Michael Tomz
Author: John Adams