This paper investigates the impact of environmental regulations on inward foreign direct investment (FDI) using a novel index that distinguishes between the implementation and enforcement of environmental policy across 111 countries from 2001 to 2018. Leveraging bilateral FDI data and a structural gravity model, we find robust evidence of a Pollution Haven Effect: weaker environmental regulations in host countries are associated with higher levels of inward FDI. The effect is more pronounced in emerging markets and in environments with higher corruption. Importantly, we show that FDI responds more strongly to policy implementation, capturing formal regulatory commitment, than to enforcement, measured as deviations between predicted and actual emissions. In addition, bilateral FDI patterns are shaped by the environmental stringency gap between source and host countries, consistent with regulatory arbitrage behavior.

Early signs suggest that Trump may revise the Biden administration's incentive-driven semiconductor policy and instead rely more heavily on tariffs to restore US semiconductor manufacturing. To what extent can semiconductor tariffs serve as a form of policy whiplash to compel foreign companies to relocate their operations? This article argues that while tariffs can influence investment decisions, Trump overstates their effects on fab locations and supply chain diversification. Semiconductor manufacturers weigh a complex set of factors encompassing partners in the supply chain ecosystem, potential regulatory scrutiny, technological trends, and more. Tariffs in and of themselves may not be a determinative factor behind TSMC's recently announced plan to expand its US investment.

This article explores the development of a group of free-standing companies in Colombia in the first decades of the twentieth century. The article illustrates how the British investor Shirley Jenks, who closely matches the description of the “gentlemanly capitalist” social class, leveraged “free-standing companies” as an investment vehicle to construct interconnected strategic business interests. The article illustrates the versatility offered by “free-standing companies” and how, in combination with “collaborating elites,” the mechanisms of the London capital market could be used to construct and administer a significant business empire in the periphery with little local presence or direct influence.

Whether China can avoid the middle-income trap has been the subject of extensive research. Currently classified as an upper middle-income country, China increasingly exhibits similar characteristics as countries currently experiencing the middle-income trap. However, using evidence from China’s coastal manufacturing city of Dongguan, this article shows how China’s approach to global value chain (GVC) participation created conditions for avoiding the middle-income trap: 1) agglomeration and manufacturing scale at multiple stages of production, 2) a mix of foreign and domestic enterprises, 3) participation in GVCs for multiple industries, 4) development of domestic demand, and 5) continuously reconfiguring government industrial policies. With these characteristics, China’s economy is likely to continue to grow, suggesting that GVC participation can facilitate a path around the middle-income trap.

Research shows that foreign asset expropriation narrows long-term bond spreads, resulting in lower borrowing costs. However, no empirical studies have investigated the effects of expropriation on sovereign bond ratings. Bondholders and sovereign bond issuers track ratings by credit rating agencies because they impact interest rates and capital costs. Using up to 59 developing countries from 1996 to 2016, we find that expropriation signals lower bond repayment, as asset confiscation blatantly violates international rule of law and discourages foreign direct investment (FDI) inflows, reducing bond ratings. Mediation analysis also indicates that FDI and the rule of law mediate the relationship between expropriation and bond ratings. Further, we distinguish between direct and indirect expropriation and observe that direct expropriation has a greater probability of decreasing ratings. Our research suggests that expropriation holds economic consequences for developing countries, indicating how expropriation negatively affects sovereign bond issuers in the financial and investment community.

This article presents a business history of the Barranquilla Railway and Pier Company (BRPC) and its impact on Colombia’s Caribbean region. It explores the company’s operations, profitability, shareholders, infrastructure development, and competition with other coastal railways for insights into the role of foreign capital in regional growth. The BRPC’s railway and port infrastructure connected the coastal city of Barranquilla with the Colombian interior, allowing the city to supplant Cartagena as the country’s principal international port. Statistical analysis reveals the railway’s remarkable profitability, which attracted transnational investors, who consolidated majority control. The company’s ability to leverage engineering expertise and capital underscored its strategic significance, yet its interests centered on protecting its transport monopoly. The railway’s lack of visibility in London and information asymmetries shaped investor perceptions. Extending the pier demonstrated BRPC’s role in accommodating rising export volumes during Colombia’s “despegue cafetero.” However, the railway faced obsolescence, as the government opened the obstructing Bocas de Ceniza sandbank and pursued railway nationalization. The railway’s redundancy, demographic shifts, and rise of Buenaventura underscore its eventual decline. This paper reveals the complex dynamics between foreign capital, infrastructure, and trade monopolies in shaping uneven development. It highlights the BRPC’s overlooked yet fundamental role in Colombia’s export economy and Barranquilla’s ascendancy.

Does Chinese aid to African countries trigger Chinese foreign direct investment? Bridging the literature on the impact of foreign aid on foreign direct investment (FDI) and that on state ownership, we consider FDI by China's state-owned enterprises (SOEs) compared with that of its privately owned enterprises (POEs) and find FDI by the former is more likely to follow Chinese governmental aid to Africa. Borrowing from institutional theory, we posit that FDI by SOEs follows political imperatives while FDI by POEs pursues market motives. Using data from multiple sources on 3,760 Chinese FDI projects in Africa between 2001 and 2015, we find a correlation between SOE FDI and government aid than that of POEs; that aid has a greater impact on the probability of FDI when the policies of the host country and those of China are in sync, especially in the case of SOEs; and that in low-investment-risk countries the link between aid and investment is weakened, especially in the case of POEs. The results are robust and consistent across different measures and analyses. We contribute to the literature on the relationship between aid and FDI, as well as to that on varieties of capitalism.

I present a theoretical framework that links different configurations of organized violence to global patterns in foreign direct investment (FDI). Insurgents, states, and rogue government agents all use violence for political purposes (i.e., incapacitating rivals), but they vary in how they use violence for economic purposes (i.e., generating income). Applying Olson’s (1993) concepts of “roving” and “stationary” banditry, I hypothesize that violence perpetrated by rebels and rogue agents indeed depresses a host country’s commercial appeal, but that violence perpetrated willfully by the state doesn’t. This claim is tested against data on FDI “entry” by several thousand multinational corporations between 1994 and 2018.

Why do firms demand antidumping protectionism? Contemporary literature highlights a plethora of causal mechanisms within the data-generating process, including retaliatory motives, exchange rate appreciations, business cycles, and deindustrialization. I argue that countries that are economically integrated into global markets should be associated with less demand for antidumping trade remedies. In particular, countries with higher levels of trade and financial flows should receive fewer petitions for antidumping trade remedies from firms overall, ceteris paribus. I test this theoretical argument with a series of de facto globalization indicators collected from thirty-three countries between 1978 and 2022, finding support for these arguments.

When and how does stakeholder credibility matter in shaping public opinion? We explore this question in a real-world setting: in order to fight its citizens’ financial exclusion—a key barrier to development in Indian Country—American Indian Nation “A” negotiated the first entry of the first bank to its reservation. The bank is owned by American Indian Nation “B.” To the Federal Reserve, the bank branch is a potential proof-of-concept for the capacity of tribe-to-tribe investment to improve capital access in underserved Native communities. The bank’s success ultimately depends on whether Nation A’s citizens use its services; in the months before its opening, all three stakeholders independently attempted to influence public opinion toward the bank. We collaborated to conduct a first-of-its-kind survey of Nation A’s tribal members, finding high baseline buy-in especially given the bank’s nationality, but weak and even counterproductive treatment effects of pro-banking cues provided by Nation A and the Federal Reserve. Our results make clear the practical benefits of theory-building around stakeholder credibility, and the crucial role of individual attitudes in the political economy of development.