Publication Type: Conference Paper/Unpublished Manuscript
Abstract: This paper studies the association between natural resource endowments and FDI inflows. Political science literature has mainly focused on the natural resource dependence on the one hand and political regime type (Ross 2000; Wantchekon 2000; Wantchekon and Jensen 2000), civil conflict (Collier and Hoeffler 2001) and economic growth (Sachs and Warner 1997, 1997, 2001; Rodriquez and Sachs 1999; Leite and Weidman 1999; Gylafson 2001; Manzano and Rigobon 2001) on the other. Interestingly, regime type, civil conflict and economic growth are some of the industry standard independent variables in the FDI literature as well. But this complexity of relationships created more questions than answers, instead of giving rise to systematic studies of the association between natural resource endowments and FDI. This specifically applies to regime type/FDI literature. Though there are many studies that do not find any relationship between regime type and FDI, or negative relationship between democracy and FDI (Oneal 1994; Alesina and Dollar 1998; and Jessup 1999), Jensen?s (2003) finds a positive association between democracy and FDI, and at some point he tries to explain this result by natural resource factor. But after finding evidence for the aforementioned claim in a cross national study looking at 1980s-90s, he still finds a positive relationship between democracy and FDI in his time series models that look at 1970-1997, though not controlling for the resource variable this time. Other scholars of regime-FDI too seem to be aware of the considerable potential role of natural resource in terms of FDI, and regime FDI association eventually. Jessup, for instance, excludes oil in his study implying its, among other natural resources, special attractiveness for FDI (1999, 21). Yet still, he finds different association between regime type and FDI inflows than Jensen (2003), which in turn makes the relationship between natural resources and FDI on the hand, and the way this relationship affects the association between regime type and FDI inflows on the other, more puzzling. This paper is an attempt at a systematic inquiry into the relationship between natural resource richness and FDI inflows. A secondary aim is to sort out how natural resource variable?s presence affects the association between regime type and FDI. Despite the generally held assumption and some findings, in this paper, those nations with more natural resource endowments are claimed have more bargaining power and thus are expected to be more successful in limiting the participation of MNCs to as small as possible controlling stakes if at all. And since such rich nations, specifically after the wave of nationalizations, had time to accumulate huge financial resources themselves (which can be expected to be positively related to resource abundance), they will need lesser FDI than those with less resources, or those who entered the market lately, like post Soviet states. These, combined with the nationalization waves of the 1970s, whose main target was natural resource related firms (Jodice 1980; Kobrin 1980), can be expected to result in a negative relationship between natural resource endowments and FDI inflows. There are different theories that expect different associations between regime type and the FDI flows. This paper is not directly dealing with it. And thus, whether regime type matters while controlling for the natural resource variable, will be of interest mainly as an empirical question. Yet for the reasons to be explained later, the expectation will be no relationship between regime type and FDI inflows. Variables and Research DesignThe dependent variable is net FDI inflows as a percentage of GDP (Jensen 2003). The main independent variable, Resource, is intended to measure a country?s natural resource abundance. It is taken from Ross (2001), which measures it as the combined value of the exports of fuel, metal and ores as the percentage of GDP. With slight modifications this operationalization is in line with Jensen (2003) and Sachs and Warner (1995). Control variables are mainly taken form WDI 2004, Polity IV (2002) and Banks (2004).

Publication Type: Conference Paper/Unpublished Manuscript
Abstract: This research examines the effects of the post-communist parties in transitional government on foreign direct investment (FDI) inflows. Is there variation in FDI inflows depending on who seizes power in those countries? If so, what kind of government is more likely to induce or prohibit FDI inflows? Why is it so? While FDI into transition economies is reported to have positive effects such as facilitating economic growth and technological innovation and accelerating enterprise restructuring, not all post-communist countries enjoyed the benefits of FDI. In fact, unlike the Czech Republic, Hungary, and Poland, other transitional countries failed to attract much attention of foreign investors. In addition, FDI inflows into the Central and Eastern Europe are relatively smaller than those to other developing countries even though the Central and East European countries are regarded as having greatest development potential (Bandelj 2002). To address these empirical questions, this research explores the determinants of FDI in the post-communist countries with special attention to the role played by the post-communist parties in government.

Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: How do institutions affect inflowing FDI? This paper suggests that certain institutional configurations signal stability, altering the uncertainty and decision-making equations of foreign investors, thus reducing risk and encouraging investment.

Publication Type: Conference Paper/Unpublished Manuscript
Abstract: Foreign direct investment (FDI) from the US to the developing world has gradually increased in recent decades. During the same period, the US has launched a bilateral investment treaties (BITs) program, which resulted in the conclusion of more than fifty treaties. Many, but not all, these BITs have entered into force. This study examines the effect of BITs signed and in force on American FDI inflows into developing countries. Theoretically, it argues that a signed BIT operates as a costly signal of pro-investment climate and that a BIT in force operates as a credible commitment to an irreversible favorable treatment of foreign investors. To the extent that these mechanisms function properly, they should increase FDI inflows. I test these putative relationships with a data set that includes a large number of developing countries from 1977 to 2004. Employing alternative model specifications and controlling for several economic and political variables, I find that a BIT in force increase FDI inflows to the host economy, but that a signed BIT that is not does not. These findings indicate that investors are more concerned with time-inconsistency problems rather than uncertainty regarding the host government’s general economic orientation at the time of the initial investment.

Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: Current scholarship provides puzzling theoretical linkages and evidence wrt the impact of regime type on inflows of foreign direct investment. Our cross-national, time-series analysis over 20 years shows that democratic regimes attract more FDI.