Download
democratic governance and multinational corporations n.
Skip this Video
Loading SlideShow in 5 Seconds..
Democratic Governance and Multinational Corporations PowerPoint Presentation
Download Presentation
Democratic Governance and Multinational Corporations

Democratic Governance and Multinational Corporations

245 Vues Download Presentation
Télécharger la présentation

Democratic Governance and Multinational Corporations

- - - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

  1. Democratic Governance and Multinational Corporations Political Regimes and Inflows of Foreign Direct Investment ~ by Nathan Jensen

  2. Research Question • How political regimes affect FDI Inflows? • Dependent Variable • Net FDI Inflows • Independent Variable • Democracy Level

  3. Author’s Motivation • “critics argue that the benefits of multinational production come with substantial costs for governments and their citizens. The need to attract FDI pressures governments to provide a climate more hospitable to foreign corporations” • Jensen p.587

  4. Argument • “I argue that once a multinational has invested in a foreign market, disinvestment of physical assets is costly. Multinationals face tremendous political risks.”

  5. Hypotheses • “The hypothesis [is] that democratic institutions are associated with higher levels of FDI inflows.” • Pg 597

  6. Research Design (4 tests) • Sample • 114 countries • 1970-1997 • Dependent variable • Measure: FDI as a percentage of gross domestic investment • Independent Variable • Democracy Level • Measure of Political Regime averages for 1990 from the Polity III data set be Jaggers and Gurr

  7. Tests • Test Set One • Estimates the effects of democratic institutions on FDI inflows in a cross-section of countries in the 1990s. • Test Set Two • Tests the relationship by using a time series cross-sectional analysis of more than 100 countries for almost thirty years.

  8. Tests • Test Set Three • Employs a Heckman selection Model to further examine the robustness of the relationship. • Final Test • Examines the causal mechanism linking democracy and FDI by examining the effects of democratic institutions on sovereign debt ratings

  9. Results • “Democratic institutions are not in efficient institutions in terms of attracting multinational corporations. There is simply no empirical evidence that [MNCs] prefer to invest in dictatorships over democratic regimes.” • Pg 612

  10. Criticisms • Too Broad – 114 countries…could have been more specific with smaller number • Too many models – 19 • Democracy rating was ambiguous • Measure of Political Regime averages for 1990 from the Polity III data set be Jaggers and Gurr

  11. Contributions • “The empirical analysis in this article develops a number of models of FDI inflows, checking the robustness of the link between democratic governance and FDI by changing the model specifications and empirical tests.” • Pg 597