Does partisan conflict deter FDI inflows to the US?

• 成果类型: Article
• 署名作者: Azzimonti, Marina
• 署名单位: State University of New York (SUNY) System; Stony Brook University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2019.06.001
• 发表日期: 2019
• 页码: 162-178
• 关键词: foreign direct investment; Trade Partisan Conflict Index; Policy Uncertainty; FDI; capital flows; Trade policy

摘要

I analyze how partisan conflict about trade policy affects foreign direct investment flows to the US using a novel indicator, the Trade Partisan Conflict Index (TPCI). Partisan conflict is relevant for the evolution of cross-border capital flows because the expected returns on investment projects are less predictable when the timing, size, and composition of trade policy is uncertain. The trade partisan conflict index tracks the evolution of political disagreement among policymakers on topics such as tariffs, subsidies, and trade agreements as reported by the media. Using data from 1985 to 2016,I show that an innovation of the TPCI is associated with a significant decline in FDI flows to the US. The effect is also present when disaggregated (annual) data from a panel of parent countries is considered instead. (C) 2019 Elsevier B.V. All rights reserved.