Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI

The relationship between political violence and greenfield foreign direct investment is contingent on the type of violence, characteristics of the investment-receiving sector, and extent to which the investing firm is geographically diversified. Th...

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Main Authors:	Witte, Caroline T., Burger, Martijn J., Ianchovichina, Elena I., Pennings, Enrico
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2017
Subjects:	direct foreign investment foreign direct investment DFI FDI political violence political conflict economic geography multilnational firms resource extraction risk
Online Access:	http://documents.worldbank.org/curated/en/192481481638146614/Dodging-bullets-the-heterogeneous-effect-of-political-violence-on-greenfield-FDI http://hdl.handle.net/10986/25813

id	okr-10986-25813
recordtype	oai_dc
spelling	okr-10986-258132021-06-08T14:42:46Z Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI Witte, Caroline T. Burger, Martijn J. Ianchovichina, Elena I. Pennings, Enrico direct foreign investment foreign direct investment DFI FDI political violence political conflict economic geography multilnational firms resource extraction risk The relationship between political violence and greenfield foreign direct investment is contingent on the type of violence, characteristics of the investment-receiving sector, and extent to which the investing firm is geographically diversified. This paper presents an analysis with a dynamic fixed effects model for a panel of 90 developing countries from 2003 to 2012. The analysis shows that nationwide political conflict is negatively associated with total and non-resource-related greenfield foreign direct investment, but not with resource-related greenfield foreign direct investment. The insensitivity to political conflict of multinational firms in the resource sector is associated with the high profitability of natural resource extraction and the companies' geographic constraints on location choice during the period of estimation. In the non-resource sector, the less geographically diversified firms are most sensitive to the risk of conflict. 2017-01-05T22:05:08Z 2017-01-05T22:05:08Z 2016-12 Working Paper http://documents.worldbank.org/curated/en/192481481638146614/Dodging-bullets-the-heterogeneous-effect-of-political-violence-on-greenfield-FDI http://hdl.handle.net/10986/25813 English en_US Policy Research Working Paper;No. 7914 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	direct foreign investment foreign direct investment DFI FDI political violence political conflict economic geography multilnational firms resource extraction risk
spellingShingle	direct foreign investment foreign direct investment DFI FDI political violence political conflict economic geography multilnational firms resource extraction risk Witte, Caroline T. Burger, Martijn J. Ianchovichina, Elena I. Pennings, Enrico Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI
relation	Policy Research Working Paper;No. 7914
description	The relationship between political violence and greenfield foreign direct investment is contingent on the type of violence, characteristics of the investment-receiving sector, and extent to which the investing firm is geographically diversified. This paper presents an analysis with a dynamic fixed effects model for a panel of 90 developing countries from 2003 to 2012. The analysis shows that nationwide political conflict is negatively associated with total and non-resource-related greenfield foreign direct investment, but not with resource-related greenfield foreign direct investment. The insensitivity to political conflict of multinational firms in the resource sector is associated with the high profitability of natural resource extraction and the companies' geographic constraints on location choice during the period of estimation. In the non-resource sector, the less geographically diversified firms are most sensitive to the risk of conflict.
format	Working Paper
author	Witte, Caroline T. Burger, Martijn J. Ianchovichina, Elena I. Pennings, Enrico
author_facet	Witte, Caroline T. Burger, Martijn J. Ianchovichina, Elena I. Pennings, Enrico
author_sort	Witte, Caroline T.
title	Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI
title_short	Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI
title_full	Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI
title_fullStr	Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI
title_full_unstemmed	Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI
title_sort	dodging bullets : the heterogeneous effect of political violence on greenfield fdi
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/192481481638146614/Dodging-bullets-the-heterogeneous-effect-of-political-violence-on-greenfield-FDI http://hdl.handle.net/10986/25813
_version_	1764460214300442624

Dodging Bullets : The Heterogeneous Effect of Political Violence on Greenfield FDI

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