Do political institutions affect foreign direct investment? A survey of U.S. corporations in Latin America

Glen Biglaiser, Joseph L. Staats

Research output: Contribution to journalArticlepeer-review

48 Scopus citations

Abstract

The political economy literature investigates the determinants of foreign direct investment (FDI) based largely on aggregate data, ignoring the actual decision makers. The authors conduct a survey of U.S. chief executive officers- the actual decision makers-of corporations that have investments in Latin America to understand FDI inflows. The authors find that investment risk related to property-rights protection, adherence to rule of law, and an effective court system weighed most heavily in U.S. firm preferences. The results suggest that rather than stress democracy itself as a determining factor, researchers might better focus on the institutions found within democracies.

Original languageEnglish (US)
Pages (from-to)508-522
Number of pages15
JournalPolitical Research Quarterly
Volume63
Issue number3
DOIs
StatePublished - Oct 7 2010

Keywords

  • effective courts
  • foreign direct investment
  • investment security
  • property rights
  • rule of law

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