Emerging from war: Public policy and patterns of foreign direct investment recovery in postwar environments
Tóm tắt
The postwar environment is different from those of active war and established peace, with risks of violence and political volatility existing alongside renewed commitments to stability and development. International aid organizations join governing institutions in guiding policies for postwar growth. Though investments here are risky, I argue that governments can clarify key uncertainties and accelerate the process of recovering FDI by strengthening policy in areas of information transparency, governing accountability, and engagement with international aid. These ideas are tested with a survival analysis of inbound FDI recovery using a worldwide sample of postwar periods from 1970 to 2008. I find that while transparency and accountability accelerate FDI recovery as expected, foreign aid tends to be associated with slower rates of recovery. Rather than encourage postwar FDI with a commitment to development, aid may be an indirect signal that the environment is yet unfit for private sector investment. Policymakers and aid organizations should not rely on aid alone to attract foreign investment in postwar environments. Structures that encourage investment for social responsibility, with a long-term market outlook, may be more successful in these contexts.
Tài liệu tham khảo
Alexander, J. 1997. The local state in post-war Mozambique: Political practice and ideas about authority. Africa, 67(1): 1–26.
Allansson, M., & Croicu, M. 2017. UCDP battle-related deaths dataset codebook, version 18.1. Uppsala Conflict Data Program.
Alon, I., & Herbert, T. T. 2009. A stranger in a strange land: Micro political risk and the multinational firm. Business Horizons, 52(2): 127–137.
Amiram, D. 2012. Financial information globalization and foreign investment decisions. Journal of International Accounting Research, 11(2): 57–81.
Asiedu, E. 2006. Foreign direct investment in Africa: The role of natural resources, market size, government policy, institutions and political instability. The World Economy, 29(1): 63–77.
Banerjee, A. V., & Duflo, E. 2011. Poor economics: A radical rethinking of the way to fight global poverty. New York: PublicAffairs.
Bennett, D. L., Faria, H. J., Gwartney, J. D., & Morales, D. R. 2017. Economic institutions and comparative economic development: A post-colonial perspective. World Development, 96: 503–519.
Beugelsdijk, S., Hennart, J. F., Slangen, A., & Smeets, R. 2010. Why and how FDI stocks are a biased measure of MNE affiliate activity. Journal of International Business Studies, 41(9): 1444–1459.
Biglaiser, G., & DeRouen, K. 2007. Following the flag: Troop deployment and US foreign direct investment. International Studies Quarterly, 51(4): 835–854.
Biglaiser, G., & Staats, J. L. 2010. Do political institutions affect foreign direct investment? A survey of US corporations in Latin America. Political Research Quarterly, 63(3): 508–522.
Boon, K. 2006. “Open for Business”: International financial institutions, postconflict economic reform, and rule of law. In Proceedings of the ASIL annual meeting (Vol. 100: 142–144). Cambridge: Cambridge University Press.
Bray, J. 2004. MIGA’s Experience in Conflict-Affected Countries: The Case of Bosnia and Herzegovina. Conflict Prevention & Reconstruction, Environmentally and Socially Sustainable Development Network, World Bank.
Bray J. 2005. International companies and post-conflict reconstruction: Cross-sectoral comparisons. Social Development Papers, No. 22. The World Bank.
Brinkerhoff, D. W. 2005. Rebuilding governance in failed states and post-conflict societies: Core concepts and cross-cutting themes. Public Administration and Development, 25(1): 3–14.
Buckley, P. J., Chen, L., Clegg, L. J., & Voss, H. 2016. Experience and FDI risk-taking: A microfoundational reconceptualization. Journal of International Management, 22(2): 131–146.
Busse, M., & Hefeker, C. 2007. Political risk, institutions and foreign direct investment. European Journal of Political Economy, 23(2): 397–415.
Cantwell, J., Dunning, J. H., & Lundan, S. M. 2010. An evolutionary approach to understanding international business activity: The co-evolution of MNEs and the institutional environment. Journal of International Business Studies, 41(4): 567–586.
Center for Systemic Peace. 2020a. Polity5 Project. Retrieved July 30, 2020, from www.systemicpeace.org.
Center for Systemic Peace. 2020b. State Fragility Index and Matrix. Retrieved July 30, 2020, from www.systemicpeace.org.
Cerra, V., & Saxena, S. C. 2008. Growth dynamics: The myth of economic recovery. American Economic Review, 98(1): 439–457.
Collier, P. 2009. Post-conflict recovery: How should strategies be distinctive? Journal of African Economies, 18(suppl_1): i99–i131.
Collier, P., Hoeffler, A., & Söderbom, M. 2008. Post-conflict risks. Journal of Peace Research, 45(4): 461–478.
Crane, C. C., & Terrill, W. A. 2003. Reconstructing Iraq: Insights, challenges, and missions for military forces in a post-conflict scenario. Report, U.S. Army War College, Strategic Studies Institute.
Crawford, V. 2019. 7 ways business can be agents for peace. World Economic Forum, 28 May 2019. Retrieved August 2, 2020, from https://www.weforum.org/agenda/2019/05/7-ways-business-can-be-agents-for-peace/.
Cronin, J. 2004. A mobile vision for Africa. BBC News Online, 5 July, 2004. Retrieved August 2, 2020, from http://news.bbc.co.uk/2/hi/business/3854495.stm.
Dai, L., Eden, L., & Beamish, P. W. 2013. Place, space, and geographical exposure: Foreign subsidiary survival in conflict zones. Journal of International Business Studies, 44(6): 554–578.
Dai, L., Eden, L., & Beamish, P. W. 2017. Caught in the crossfire: Dimensions of vulnerability and foreign multinationals’ exit from war-afflicted countries. Strategic Management Journal, 38(7): 1478–1498.
Daude, C., & Stein, E. 2007. The quality of institutions and foreign direct investment. Economics & Politics, 19(3): 317–344.
Davidson, R., & MacKinnon, J. G. 2004. Econometric theory and methods. New York: Oxford University Press.
Davies, L. 2004. Building a civic culture post-conflict. London Review of Education, 2(3): 229–244.
Degnbol-Martinussen, J., & Engberg-Pedersen, P. 2005. Aid: Understanding international development cooperation. Trans: Bille, M. London: Zed Books Ltd.
Del Castillo, G. 2008. Rebuilding war-torn states: The challenge of post-conflict economic reconstruction. Oxford: Oxford University Press.
Delios, A., & Henisz, W. J. 2003. Political hazards, experience, and sequential entry strategies: The international expansion of Japanese firms, 1980-1998. Strategic Management Journal, 24(11): 1153–1164.
Djankov, S., Montalvo, J. G., & Reynal-Querol, M. 2008. The curse of aid. Journal of Economic Growth, 13(3): 169–194.
Dobbins, J., Jones, S. G., Crane, K., & DeGrasse, B. C. 2007. The beginner’s guide to nation-building. Santa Monica: The RAND Corporation.
Driffield, N., Jones, C., & Crotty, J. 2013. International business research and risky investments, an analysis of FDI in conflict zones. International Business Review, 22(1): 140–155.
Easterly, W. 2006. The white man’s burden: Why the West’s efforts to aid the rest have done so much ill and so little good. New York: Penguin Press.
Fanthorpe, R. 2006. On the limits of liberal peace: Chiefs and democratic decentralization in post-war Sierra Leone. African affairs, 105(418): 27–49.
Farole, T., & Akinci, G. 2011. Special economic zones: Progress, emerging challenges, and future directions. Washington, DC: The World Bank.
Flores, T. E., & Nooruddin, I. 2009. Democracy under the gun: Understanding postconflict economic recovery. Journal of Conflict Resolution, 53(1): 3–29.
Forrer, J., & Katsos, J. E. 2015. Business and peace in the buffer condition. Academy of Management Perspectives, 29(4): 438–450.
Garriga, A. C., & Phillips, B. J. 2014. Foreign aid as a signal to investors: Predicting FDI in post-conflict countries. Journal of Conflict Resolution, 58(2): 280–306.
Greenwood, R., Díaz, A. M., Li, S. X., & Lorente, J. C. 2010. The multiplicity of institutional logics and the heterogeneity of organizational responses. Organization Science, 21(2): 521–539.
Hacioglu, U., Celik, I. E., & Dincer, H. 2012. Risky business in conflict zones: Opportunities and threats in post conflict economies. American Journal of Business and Management, 1(2): 76–82.
Hassan, E. A., Rankin, M., & Lu, W. 2014. The development of accounting regulation in Iraq and the IFRS adoption decision: An institutional perspective. The International Journal of Accounting, 49(3): 371–390.
He, C. 2002. Information costs, agglomeration economies and the location of foreign direct investment in China. Regional Studies, 36(9): 1029–1036.
Henisz, W. J. 2000. The institutional environment for multinational investment. The Journal of Law, Economics, and Organization, 16(2): 334–364.
Henisz, W. J., & Zelner, B. A. 2005. Legitimacy, interest group pressures, and change in emergent institutions: The case of foreign investors and host country governments. Academy of Management Review, 30(2): 361–382.
Hoskisson, R. E., Eden, L., Lau, C. M., & Wright, M. 2000. Strategy in emerging economies. Academy of Management Journal, 43(3): 249–267.
Hotho, J. J., Lyles, M. A., & Easterby-Smith, M. 2015. The mutual impact of global strategy and organizational learning: Current themes and future directions. Global Strategy Journal, 5(2): 85–112.
Hox, J. J. 2010. Multilevel analysis: Techniques and applications (2nd ed.). New York: Routledge.
Iraq Stock Exchange. 2004-2019. Yearly Reports. Retrieved February 15, 2020, from http://isx-iq.net.
Javorcik, B. S., & Wei, S. J. 2009. Corruption and cross-border investment in emerging markets: Firm-level evidence. Journal of International Money and Finance, 28(4): 605–624.
Kalbfleisch, J., & Prentice, R. 1980. The statistical analysis of failure time data. New York: Wiley.
Kang, S., & Meernik, J. 2005. Civil war destruction and the prospects for economic growth. The Journal of Politics, 67(1): 88–109.
Kelly, T., & Souter, D. 2014. The role of information and communication technologies in postconflict reconstruction. Washington, DC: The World Bank.
Kolstad, I., & Wiig, A. 2012. What determines Chinese outward FDI? Journal of World Business, 47(1): 26–34.
Le Billon, P. 2008. Corrupting peace? Peacebuilding and post-conflict corruption. International Peacekeeping, 15(3): 344–361.
Luiz, J. M., Ganson, B., & Wennmann, A. 2019. Business environment reforms in fragile and conflict-affected states: From a transactions towards a systems approach. Journal of International Business Policy, 2(3): 217–236.
Lundan, S. M. 2018. From the editor: Engaging international business scholars with public policy issues. Journal of International Business Policy, 1: 1–11.
Ma, X., & Fitza, M. 2013. How much does subnational region matter to foreign subsidiary performance? Evidence from Fortune Global 500 corporations’ investment in China. Journal of International Business Studies, 44(1): 66–87.
Mehlum, H., Moene, K., & Torvik, R. 2006. Institutions and the resource curse. The Economic Journal, 116(508): 1–20.
Meyer, K. E. 2015. Context in management research in emerging economies. Management and Organization Review, 11(3): 369–377.
Meyer, K. E., & Peng, M. W. 2005. Probing theoretically into Central and Eastern Europe: Transactions, resources, and institutions. Journal of International Business Studies, 36(6): 600–621.
Meyer, K. E., & Peng, M. W. 2016. Theoretical foundations of emerging economy business research. Journal of International Business Studies, 47(1): 3–22.
Meyer, K. E., Mudambi, R., & Narula, R. 2011. Multinational enterprises and local contexts: The opportunities and challenges of multiple embeddedness. Journal of Management Studies, 48(2): 235–252.
Mills R., & Fan, Q. 2006. The investment climate in post-conflict situations. The World Bank, World Bank Policy Research Working Paper 4055.
Mills, M. 2011. Introducing survival and event history analysis. Thousand Oaks: Sage.
Moyo, D. 2010. Dead aid: Why Aid is not working and how there is a better way for Africa. New York: Farrar, Straus and Giroux.
Oetzel, J., & Getz, K. 2012. Why and how might firms respond strategically to violent conflict? Journal of International Business Studies, 43(2): 166–186.
Oetzel, J., Westerman-Behaylo, M., Koerber, C., Fort, T. L., & Rivera, J. 2010. Business and peace: Sketching the terrain. Journal of Business Ethics, 89: 351–373.
Paris, R. 2010. Saving liberal peacebuilding. Review of International Studies, 36(2): 337–365.
Peng, M. W., Wang, D. Y. L., & Jiang, Y. 2008. An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies, 39(5): 920–936.
Pettersson, T., & Eck, K. 2018. Organized violence, 1989-2017. Journal of Peace Research, 55(4): 574–587.
Preacher, K. J., & Hayes, A. F. 2008. Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior Research Methods, 40(3): 879–891.
Rettberg, A. 2016. Need, creed, and greed: Understanding why business leaders focus on issues of peace. Business Horizons, 59: 481–492.
Riddell, R. C. 2008. Does foreign aid really work?. Oxford: Oxford University Press.
Ring, P. S., Bigley, G. A., D’Aunno, T., & Khanna, T. 2005. Perspectives on how governments matter. Academy of Management Review, 30(2): 308–320.
Robinson, J. A., Torvik, R., & Verdier, T. 2006. Political foundations of the resource curse. Journal of Development Economics, 79(2): 447–468.
Rose-Ackerman, S. 2008. Corruption and government. International Peacekeeping, 15(3): 328–343.
Sachs, J. 2005. The end of poverty. London: Penguin Press.
Santiso, C. 2001. Good governance and aid effectiveness: The World Bank and conditionality. The Georgetown Public Policy Review, 7(1): 1–22.
Sarkees, M. R., & Wayman, F. 2010. Resort to war: 1816–2007. Washington DC: CQ Press.
Sawyer, A. 2008. Emerging patterns in Liberia’s post-conflict politics: Observations from the 2005 elections. African Affairs, 107(427): 177–199.
Slangen, A. H., & Beugelsdijk, S. 2010. The impact of institutional hazards on foreign multinational activity: A contingency perspective. Journal of International Business Studies, 41(6): 980–995.
Small, M., & Singer, J. D. 1982. Resort to arms: International and civil wars, 1816-1980. Beverly Hills: Sage.
Sutherland, D., Anderson, J., Baily, N., & Alon, I. 2020. Policy, institutional fragility, and Chinese outward foreign direct investment: An empirical examination of the Belt and Road Initiative. Journal of International Business Policy, 3(3): 249–272.
Tan, D., & Meyer, K. E. 2011. Country of origin and industry FDI agglomeration of foreign investors in an emerging economy. Journal of International Business Studies, 42(4): 504–520.
Turner, N. Aginam, O., & Popovski, V. 2008. Post-conflict countries and foreign investment. Policy Brief: United Nations University.
Wardak, A. 2004. Building a post-war justice system in Afghanistan. Crime, Law and Social Change, 41(4): 319–341.
Westermann-Behaylo, M. K., Rehbein, K., & Fort, T. 2015. Enhancing the concept of corporate diplomacy: Encompassing political corporate social responsibility, international relations, and peace through commerce. Academy of Management Perspectives, 29(4): 387–404.
Williams, A. 2015. A global index of information transparency and accountability. Journal of Comparative Economics, 43(3): 804–824.
Winters, M. S. 2010. Accountability, participation and foreign aid effectiveness. International Studies Review, 12: 218–243.
World Bank Group. 2006. MIGA: Reducing the risk profile of financial investments. Financial Brief, June 2006.
World Bank Group. 2018. Foreign direct investment, net inflows (BoP, current US$); GDP (current US$); and total natural resource rents (% of GDP). Databank: The World Bank. Retrieved October 1, 2018.
Wright, M., Filatotchev, I., Hoskisson, R. E., & Peng, M. W. 2005. Strategy research in emerging economies: Challenging the conventional wisdom. Journal of Management Studies, 42(1): 1–33.
Xu, D., & Meyer, K. E. 2013. Linking theory and context: ‘Strategy research in emerging economies’ after Wright et al. (2005). Journal of Management Studies, 50(7): 1322–1346.