Reciprocity and Public Opposition to Foreign Direct Investment

Abstract

Prior international political economy public opinion research has primarily examined how economic and socio-cultural factors shape individuals’ views on the flows of goods, people and capital. This research has largely ignored whether individuals also care about rewarding or punishing foreign countries for their policies on these issues. We tested this possibility by administering a series of conjoint and traditional survey experiments in the United States and China that examined how reciprocity influences opposition to foreign acquisitions of domestic companies. We find that reciprocity is an important determinant of public opinion on the regulation of foreign investments. This suggests the need to consider the policies that other countries adopt when trying to explain public attitudes toward global economic integration.

Domestic Provision of Global Public Goods: How Other Countries’ Behavior Affects Public Support for Climate Policy

“…In this vein, the article also contributes to better understanding of how the impact of other countries' behavior on policy support is dependent upon exactly which countries are involved. Across many global issues, from trade to foreign direct investment, individuals differ in their support for policy reacting to other countries' behavior dependent on whether they are allies or adversaries (Chilton et al 2017;Herrmann et al 2001;Sattler and Schweinberger 2020;Spilker et al 2016). We find that the importance of such reference points also affects the relevance of other countries' behavior.…”

“…First, which countries performance is benchmarked against, and their actions, may influence policy support. Across many global issues, individuals differ in their support for policy reacting to other countries' behavior dependent on whether they are allies or adversaries (Chilton et al 2017;Herrmann et al 2001;Sattler and Schweinberger 2020;Spilker et al 2016).…”

What’s Fair in International Politics? Equity, Equality, and Foreign Policy Attitudes

“…Concerns about fairness are usually seen as having evolutionary origins: people must be able to detect and punish cheaters if they want to enjoy the spoils from cooperation and guard themselves against exploitation (Haidt 2012), and fairness concerns typically begin to appear in children around the age of five (Fehr, Bernhard, and Rockenbach 2008). Political scientists have thus linked fairness concerns to a range of phenomena in international politics, including crisis bargaining (Gottfried and Trager 2016), post-war peace negotiations (Albin and Druckman 2012), diplomacy (Kertzer and Rathbun 2015), international humanitarian law (Chu 2019), international cooperation (Efrat and Newman 2016), and foreign direct investment (Chilton, Milner, and Tingley 2020).…”

The Grip of Nationalism on Corporate Law

“…A recent empirical study found that reciprocity is a major determinant of public opinion with respect to foreign investments. 331 Second, in the absence of reciprocity, in the long run, there will be more firms coming from countries with closed takeover markets than from countries with open ones, in ways that do not necessarily reflect efficiency advantages.…”