My research addresses a number of topics within the subfield of international political economy. I have mostly done work on foreign direct investment (FDI) in developing countries, asking questions about the policy and institutional determinants of incoming investment. I am interested in both the quantity and quality of FDI, and how host country initiatives affect the operations of multinational corporations. In the past, I have published work on multinational influence over host country policy and I have considered the relationship between labor rights violations and investment risk. My FDI research involves both large-n econometric analysis of investment patterns and case studies of investment policy in diverse economies in Latin America and on the periphery of Europe.
Beyond FDI, I also have ongoing projects on the political determinants of exchange rate regimes. I have future research agendas involving historical interpretations of late 19th century monetary politics in the United States.
My current book project examines the relationship between political institutions in emerging economies and inflows of innovation-intensive foreign direct investment. Foreign investment is now an essential ingredient in developing countries' growth strategies. Most analyses of FDI in developing countries treat FDI flows and stocks as uniform. However, not all FDI is created equal. Different sectors and firm activities vary widely in their ability to contribute to development processes, and the landscape of global FDI flows is changing. Multinational corporations increasingly locate R&D facilities in developing countries, and competition for innovative FDI is intense. As multinationals seek out global talent and develop ever more complex production chains, developing country governments increasingly seek to attract innovation-intensive forms of investment. What determines whether countries will succeed?
I argue that the policies implemented by developing governments and the investment promotion institutions through which these policies are channeled are crucial for determining the investment profiles of firms. More importantly, I show that adaptive industrial policies which move developing countries to higher value-added activities can be effective even in an era of multinational production. Drawing on large datasets with sector-specific and firm-level investment data, I illuminate the ways in which governments have succeeded and failed in integrating multinational investment into development trajectories. I also include a case study analysis of Ireland, which through the last twenty-five years has managed to attract some innovation-intensive FDI. The Irish case, while subtle and complex, illustrates how host country policies and institutions can influence both the character of incoming investment and how firm investment profiles change over time. This book is under contract at MIT Press.
The Catalytic Effect of IMF Crisis Lending: Evidence from Sectoral Data (with Michael Breen)
Abstract: Our study contributes to the search for the elusive ‘catalytic effect’ of International Monetary Fund (IMF) crisis lending on inflows of foreign direct investment (FDI). Recent scholarship has found that the catalytic effect is conditional on political regime and program stringency. We contribute to this literature by showing how the catalytic effect also varies by economic sector. This is a departure from existing studies, which have tended to focus on aggregate FDI flows after crises. Our findings corroborate previous studies, which find that in general IMF lending has a substantial and negative effect on foreign direct investment. However, we find that the negative effect is concentrated in high mobility sectors, including business activities and finance. Our findings are robust to several alternative explanations common in IMF literature, namely the importance of IMF program design and the ability of governments to make credible commitments to reform. We argue that high liquidity needs in certain sectors prompt investors to use IMF lending as an escape hatch, and that this exodus is a partial fulfillment of moral hazard dynamics.
The Political Economy of Agricultural Investment in Developing Countries: FDI as Usual? (with Joe Weinberg)
Abstract: In this paper, we investigate the recent trend of increased global investment in farmland. We build off of the literature on sectoral flows of foreign direct investment (FDI) in order to determine if these new investments conform to traditional political economy explanations of cross-national investment flows. We hypothesize that recent farmland purchases, and agricultural FDI more generally, should not conform to previous expectations and results for similar analyses of other industrial sectors and overall FDI flows and stock. We employ unique time series cross-sectional FDI data from UNCTAD, disaggregated into sectors. We use these data to replicate traditional models of FDI inflows, with sector specific FDI as the dependent variable and host country institutions as our primary independent variables. The results of the analysis demonstrate that agricultural FDI responds to host country institutions in different ways than other sectors, including mining. We argue that this is partly because the bargaining relationship between host and investor countries is different in agriculture. Land is the primary factor of production in these investments. Thus, domestic capital and labor markets have less impact on the decision making calculus of firms and the policy choices of host countries. This is consistent with older theories concerning the obsolescing bargain between firms and governments, but contradicts much of the recent received wisdom on the institutional determinants of investment in political economy literature.