The relationship between political violence and greenfield foreign direct investment is contingent on the type of violence, the characteristics of the investment-receiving sector, and the international scope of the investing firm. Analysis with a dynamic fixed effects model for a panel of 90 developing countries shows that nationwide political conflict is negatively associated with total and non-resource-related greenfield FDI, but not with resource-related greenfield FDI. The insensitivity of resource FDI to political conflict is explained by the high profitability of natural resource extraction and geographic constraints on location choice. In the non-resource sector, the least geographically diversified firms are most sensitive to conflict. Other types of political violence, including intermittent violence in the form of terrorist acts and assassinations, or persistent but low-impact events, such as political terror, have no effect on the location choice decisions of multinational enterprises. These findings inform the strategies of multinationals with a nuanced and much needed understanding of the effects of political violence and the risks it poses to their businesses. * We are grateful for the helpful comments from the editor, Mona Makhija, and three anonymous referees. Early versions of this paper were presented at the Center for the Study of African Economies (CSAE) Conference 2015 and the 2015 AIB Annual Meeting in Bangalore. We would also like to thank seminar participants at Ivey Business School, Copenhagen Business School, the University of Groningen and the Erasmus School of Economics for their useful suggestions.

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