Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI

Witte, Caroline T. ; Burger, Martijn J. ; Ianchovichina, Elena I. ; Pennings, Enrico

World Bank, Washington, DC

关键词: direct foreign investment;    foreign direct investment;    DFI;    FDI;    political violence;   

DOI  :  10.1596/1813-9450-7914
RP-ID  :  WPS7914

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The relationship between politicalviolence and greenfield foreign direct investment iscontingent on the type of violence, characteristics of theinvestment-receiving sector, and extent to which theinvesting firm is geographically diversified. This paperpresents an analysis with a dynamic fixed effects model fora panel of 90 developing countries from 2003 to 2012. Theanalysis shows that nationwide political conflict isnegatively associated with total and non-resource-relatedgreenfield foreign direct investment, but not withresource-related greenfield foreign direct investment. Theinsensitivity to political conflict of multinational firmsin the resource sector is associated with the highprofitability of natural resource extraction and thecompanies' geographic constraints on location choiceduring the period of estimation. In the non-resource sector,the less geographically diversified firms are most sensitiveto the risk of conflict.