Do Civil and Political Repression Really Boost Foreign Direct Investments?

By Philipp Harms, Heinrich W. Ursprung. Social Science Research Network, 2002

441 citations recorded by the source corpus.

Multinational enterprises are often accused to have a preference for investing in countries in which the working populations' civil and political rights are largely disregarded. This paper presents an empirical investigation of the popular "political repression boosts FDI" hypothesis and arrives at the conclusion that the hypothesis is not supported. On the contrary, multinational enterprises rather appear to be attracted by countries in which civil and political freedom is respected. Our finding thus supports the notion that there is a positive relationship between democracy and economic growth.

Subfields: Development, Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/d926132d927a9ab248c9d9b7cb5f17cbf403b27a

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Development

In Information Systems

In Strategy and Management

Citations in the corpus

The impact of globalization on the composition of government expenditures: Evidence from panel data (2006, neutral): “…on the supply side of public welfare programs, depending on the viewpoint of the observer, reduces the efficiency of benevolent governments (cf. Sinn, 2003) and/or disciplines egoistic governments who transform discretionary power into benefits for their clientele (cf. Breton and Ursprung, 2002).”
What determines Chinese outward FDI (2012, background): “Harms and Ursprung (2002) get mixed results for an oil dummy, and Asiedu (2006) finds resources significant for total FDI flows to African countries.”
Foreign direct investment and civil liberties: A new perspective (2007, background): “However, Harms and Ursprung (2002) do not find support for the argument that MNEs show a preference for undemocratic regimes.”
The Impact of Formal Institutions on Knowledge Economy (2013, neutral): “For example, Harms & Ursprung (2002) argue that authoritarian regimes are associated with a greater risk of policy reversals due to the dictator’s own whims, the need to raise public support through populist measures, or simply coups d’etat.”
Does Greater Accountability Improve the Quality of Public Service Delivery? Evidence from Uganda (2005, background): “There is evidence that levels of foreign direct investment are much higher in countries where individual freedom and respect for civil and property rights is high (Harms & Ursprung, 2002).”
Do Institutions Matter for Foreign Direct Investment? (2010, background): “Harms and Ursprung (2002) and June and Singh (1996) find that the effects of institutions on FDI are not robust.”
Determinants of foreign direct investment in services (2008, methodology): “There are a few exceptions though (Harms and Ursprung (2002), Kolstad and Villanger (2004b)), so we include the variable here.”
Globalization and gender equality in the course of development (2012, background): “…to benefit from free international trade.3 There is evidence that potential host countries with a good human-rights record and small gender disparities have an advantage in attracting foreign direct investment (see Harms and Ursprung, 2002; Busse and Hefeker, 2007; and Busse and Nunnenkamp, 2009).”
Institutions and inflows of foreign direct investment: a fuzzy-set analysis (2008, background): “Harms and Ursprung (2002), in turn, found that political rights and civil liberties increase FDI per capita inflows.”
Does good governance matter for FDI inflows? Evidence from Asian economies (2011, methodology): “Similarly, using different econometric techniques and periods, Harms and Ursprung (2002), and Busse (2004) argue that multinational corporations (MNCs) are more likely to be attracted to countries that have democracy.”