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Autocratic time horizons and the growth effect of foreign direct investment

Published online by Cambridge University Press:  22 May 2019

Daehee Bak  and
Chungshik Moon
Daehee Bak
Affiliation:
Texas Tech University, Lubbock, TX, USA
Chungshik Moon*
Affiliation:
Chung-Ang University, Seoul, South Korea
*
*Corresponding author. Email: [email protected]
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Abstract

The positive influence of foreign direct investment (FDI) on host countries' economic growth has been widely debated. Given the mixed empirical evidence, scholars have sought to find the economic preconditions under which FDI spillovers are likely to occur and facilitate economic growth in the host countries. Those preconditions are not exogenously dictated but largely shaped by governments' policy preferences. Particularly in autocracies, an autocrat's policy preferences are the driving force that determines whether a host country is likely to be equipped with growth-friendly institutions and policies. We argue that such economic institutions and policies are dependent on the time horizons of autocrats in power. Our empirical analysis covering 64 autocratic countries from 1970 to 2005 supports our main argument that FDI has a positive effect on growth when autocratic time horizons are sufficiently long, and positive FDI spillovers mainly occur through the protection of property right institutions.

Keywords

Authoritarian regimeFDI spilloversproperty rights
Type
Research Article
Information
Japanese Journal of Political Science , Volume 20 , Issue 3 , September 2019 , pp. 143 - 161
Copyright
Copyright © Cambridge University Press 2019 

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