Coercive Assets? Foreign Direct Investment and the Use of Economic Sanctions
- Authors
- Kim, Dong-Hun
- Issue Date
- 1-1월-2013
- Publisher
- ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
- Keywords
- cross-border mergers and acquisitions; economic sanctions; foreign direct investment; joint ventures
- Citation
- INTERNATIONAL INTERACTIONS, v.39, no.1, pp.99 - 117
- Indexed
- SSCI
SCOPUS
- Journal Title
- INTERNATIONAL INTERACTIONS
- Volume
- 39
- Number
- 1
- Start Page
- 99
- End Page
- 117
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/104235
- DOI
- 10.1080/03050629.2013.751305
- ISSN
- 0305-0629
- Abstract
- How does foreign direct investment (FDI) affect the use of economic coercion? This article argues that while FDI matters, the effect depends on the entry mode of the FDI. The economic interdependence created by FDI does not have a monotonic effect on economic statecraft because the relative costs incurred by economic disruption differ depending on the forms of foreign investment. In particular, the FDI that creates wholly-owned subsidiaries (for example, cross-border mergers and aquisitions) imposes greater costs to the sender's firms than cross-border joint ventures with local partners, while FDI through joint ventures incurs greater costs for the host than the home country and its firms. By utilizing US sanction episodes from the Threat and Imposition of Economic Sanctions (TIES) dataset, the empirical analysis supports the argument. The results show that economic sanctions are less likely to occur as the share of FDI through cross-border mergers and acquisitions increases.
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Collections - College of Political Science & Economics > Department of Political Science and International Relations > 1. Journal Articles
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