When Do Populist Governments Deter Foreign Direct Investment?
Populism deters FDI most in anti-immigration regimes, less in pro-business regimes.
A new study by Vera Kunczer, Thomas Lindner, and Srividya Jandhyala examines the conditions under which populist governments are more, or less, likely to discourage foreign direct investment (FDI). The study "Populism, regime characteristics, and MNC location choice" published in the Journal of International Business Studies (JIBS) finds that the negative effect of populism on FDI is weakened in pro-business regimes and when home- and host-country governments are politically aligned, but strengthened in regimes with strong anti-immigration positions. Overall, the findings suggest that foreign investment is shaped not only by the presence of populist governments but also by whether foreign firms are perceived as belonging to the regime's political "outgroup.
The article is available as open access and can be downloaded here: https://lnkd.in/eTFq9CpF
