Positive institutional changes through peace: The relative effects of peace agreements and non-market capabilities on FDI

Albino-Pimentel, João; Oetzel, Jennifer; Oh, Chang Hoon; Poggioli, Nicholas

doi:10.1057/s41267-021-00453-y

Cited by 32 publications

(6 citation statements)

References 84 publications

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“…Even without inducing policy changes, war may reduce FDI by interfering with public utilities, transportation, communication and the smooth functioning of the market, disrupting production (Darendeli and Hill, 2016), destroying private property and public infrastructure (Witte et al , 2017) and altering social and political institutions (Albino-Pimentel et al , 2021). In particular, multiple wars in a country can suppress demand and depress human capital, as skilled individuals are enlisted for war efforts, killed or injured in the ensuing violence, or uprooted and dislocated (Hiatt and Sine, 2014).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

“…The interactions between political risk and FDI have been thoroughly assessed in the political science and foreign policy literatures (Li, 2006; Pollins, 1989; Schneider and Frey, 1985), where trade (Mansfield and Pollins, 2001) and FDI (Albino-Pimentel et al , 2021) are said to depend on peace, i.e. countries trading with each other are less prone to war.…”

Section: Introductionmentioning

confidence: 99%

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Propagating a permanent war economy? U.S. FDI in warring host countries

Dai,

Paik

2024

MBR

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Purpose Conventional wisdom suggests that war in the host country makes it unattractive for foreign firms to invest. To see if this is true for US firms on the aggregate, this paper aims to examine the veracity of a “permanent war economy” hypothesis, that foreign direct investment (FDI) may, in fact, increase in the host country not despite, but because of, war, i.e. one that lends credence to the idea that, in the USA, “defense [has] become one of constant preparation for future wars and foreign interventions rather than an exercise in response to one-off threats.” Design/methodology/approach The authors test the hypotheses using Generalized Method of Moments estimation, with Heckman Selection, on US FDI data from the Bureau of Economic Analysis and war data from the Correlates of War2 Project, the Uppsala Conflict Data Program/International Peace Research Institute data set, the International Crisis Behavior Project and the Center for Systemic Peace Major Episodes of Political Violence data set. The final sample consists of 351 country-year observations in 55 host countries from 1982 to 2006. Findings The findings indicate that overall US FDI in a host country in a given year decreases if the host country is engaged in wars with multiple countries and if the US Government is involved in the war. Most notably, the results show that US involvement in multiple host country wars is actually correlated with increased US FDI into the host country, providing empirical support for the “permanent war economy” hypothesis. Originality/value While other studies have focused on war and FDI, the authors have sought to show the impact of the involvement of arguably the most influential country, i.e. the USA, in the sovereign matters of a focal host country. By studying FDI from the USA as a function of US involvement in wars overseas, over the years with the greatest use of private military companies by the USA and the largest portion of global FDI accounted for by the USA, this work motivates a research agenda on home-host-"other” relations in the context of war and FDI, with the “other” being the supranational “elephant in the room.”

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Section: Theory and Hypothesesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Propagating a permanent war economy? U.S. FDI in warring host countries

Dai,

Paik

2024

MBR

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“… Primary and integrative political capabilities need to be reviewed regularly due to the changing and transformational nature of emerging markets. Albino-Pimentel, Oetzel, Oh and Poggioli ( 2021 ) FDI investments from US firms between 2003 and 2011 Political capabilities/ influence-based non-market capabilities. Environmental, social and governance capabilities MNE foreign direct investment Institutional theory MNEs can leverage their political, environmental, social, and governance capabilities to enter conflict-affected countries successfully.…”

Section: Appendix Amentioning

confidence: 99%

Configuring political relationships to navigate host-country institutional complexity: Insights from Anglophone sub-Saharan Africa

Boso

Amankwah‐Amoah²,

Essuman³

et al. 2023

J Int Bus Stud

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We examine how ties with multiple host-country political institutions contribute to MNE subsidiary performance in countries with weak formal institutions. We suggest that forging relationships between subsidiaries and host-country government actors, local chieftains, and religious leaders generates regulative, normative, and cultural-cognitive political resources. We integrate institutional and configuration theories to argue that similarity to an ideal configuration of the three political resources contributes to MNE subsidiary performance, and that the more dysfunctional host-country institutions, the greater the impact on performance. We test our hypotheses using primary and archival data from 604 MNE subsidiaries in 23 Anglophone sub-Saharan African countries and find support for our hypotheses. In our conclusion, we discuss the wider theoretical, managerial, and public-policy implications of our findings.

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“…However, these two research disciplines rarely intersect so there is little systematic analysis of how firms and other actors seek or impact peace (Melin, 2016). The business literature has addressed peace issues on topics such as the effects of conflict on MNC operations (e.g., Dai et al, 2013), and MNC responses to conflict and peace accords (e.g., Albino-Pimentel et al, 2021; Jallat & Shultz, 2011). This has been dubbed the peace-through-commerce literature (Williams, 2008).…”

Section: Literature Backgroundmentioning

confidence: 99%

Business for peace: How entrepreneuring contributes to Sustainable Development Goal 16

Gallo

Sosa

Vélez-Calle

2022

BRQ Business Research Quarterly

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We examine entrepreneurial ventures in a post-conflict context to identify practices that are helpful for companies operating in conflict zones while contributing to the United Nations’ Sustainable Development Goal 16 (SDG 16)—Peace, Justice, and Strong Institutions. Using emancipatory entrepreneuring as our theoretical lens, we analyze entrepreneurial ventures where ex-combatants seek to create economic opportunities and challenge the status quo of violence, poverty, and inequality in their rural communities. We develop four qualitative case studies of ex-combatant entrepreneurship to identify the activities that enable them to grow their businesses while promoting peace. We identify actor distance and entrepreneurial stage as key dimensions for defining a matrix of relationship arrangements that facilitate venture success and peacebuilding efforts. We conclude with a summary of our contributions and implications for research and practice. JEL Classifications: D63, D74, H56, L14, L26

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Positive institutional changes through peace: The relative effects of peace agreements and non-market capabilities on FDI

Cited by 32 publications

References 84 publications

Propagating a permanent war economy? U.S. FDI in warring host countries

Propagating a permanent war economy? U.S. FDI in warring host countries

Configuring political relationships to navigate host-country institutional complexity: Insights from Anglophone sub-Saharan Africa

Business for peace: How entrepreneuring contributes to Sustainable Development Goal 16

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