The Long‐Term Effects of Foreign Investment Dependence on Economic Growth, 1940–1990

Kentor, Jeffrey

doi:10.1086/231295

Cited by 156 publications

(112 citation statements)

References 13 publications

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“…2 Firebaugh (1992) critiques these early world systems and dependency studies for faulty interpretations. Recently, several studies that take into account Firebaugh's critique still find negative effects of longterm FDI on economic growth and income inequality (Alderson and Nielsen 1999;Dixon and Boswell 1996;Kentor 1998), while De Soysa and O'Neal (1999) largely replicate Firebaugh's findings. In addition, some studies conclude that FDI has no effect on economic growth (Dutt 1997;Hein 1992).…”

Section: Global Economy As Instituted Process--129mentioning

confidence: 99%

The Global Economy as Instituted Process: The Case of Central and Eastern Europe

Bandelj

2009

Am Sociol Rev

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I argue that economic globalization, indicated by the tremendous rise in world foreign direct investment (FDI) in recent decades, is not driven simply by investor considerations of economic risk and return, but is significantly shaped by the construction of demand for foreign capital by receiving states. States signal this demand through the levels of formal and substantive legitimacy they grant to FDI. They institutionalize globalization in formal rule as a normatively desirable development strategy. States substantiate this commitment by providing domestic and foreign actors with ideational and organizational resources to facilitate FDI. To illustrate this argument, I use the case of Central and Eastern Europe, which was largely closed to global capital before the collapse of Communism. Analyses of quantitative and qualitative data show that substantive legitimacy granted to FDI by host states, more than formal regulations, determined the size of foreign capital flows into postsocialist countries in the first decade of market reform. These findings point to social foundations of macroeconomic trends beyond the instrumental considerations of risk and return privileged in previous research

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Section: Global Economy As Instituted Process--129mentioning

confidence: 99%

The Global Economy as Instituted Process: The Case of Central and Eastern Europe

Bandelj

2009

Am Sociol Rev

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“…This intervention was followed by a lively round of rebuttal-and-response without a clear victor (Dixon and Boswell 1996a;c.f. de Soysa and Oneal 1999;Kentor 1998). Others claimed that even though the deleterious link between FDI and development hinged critically on long-term processes of "disarticulation" in host economies, analysts misspecified their models by regressing economic growth on long-term lags of FDI without considering contemporaneous variation on FDI (de Soysa and Oneal 1999).…”

Section: Introductionmentioning

confidence: 99%

Foreign Direct Investment and Economic Growth: New Evidence from Post-Socialist Transition Countries

Curwin

Mahutga

2014

Social Forces

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I n this article, we revisit classic sociological debates regarding the growth effects of Foreign Direct Investment (FDI). First, we identify a series of theoretical and empirical issues that halted sociological research on the developmental consequences of FDI. Second, we illustrate that post-socialist transition (PST) provides a historically novel opportunity to reinvigorate the debate. These countries experienced rapid industrialization but nearly zero FDI under socialism, and we can therefore observe changes in output as FDI accumulates in real time and effectively control for alternative sources of underdevelopment that might otherwise become conflated with FDI. We then estimate growth models that correct for biases owing to country-and period-specific heterogeneity and endogeneity in the FDI→ growth link. Our results suggest that FDI penetration reduces economic growth in the short and long term, and are robust to alternative choices of measurement and econometric specification. We conclude by implicating these findings in debates about post-socialist transition and economic growth, and by posing questions for future research.

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“…Throughout history various approaches have been found to stimulate growth, from mercantilist protectionism of the sixteenth to eighteenth centuries, to command economy of socialism, to embedded autonomy that drove the growth of the Asian Tigers, among others (Bandelj & Sowers 2010). Moreover, much research in the sociology of development, adopting world-systems and dependency theoretical lenses points to negative consequences of foreign investment (Dixon & Boswell 1996;Kentor 1998Kentor , 2001de Soysa & Oneal 1999;Alderson & Nielsen 2002;Beer & Boswell 2002;Alderson 2004;Mahutga & Bandelj 2008). Further, recent studies on the link between FDI and growth have actually found a negative relationship (Herzer 2012;Curwin & Mahutga 2014).…”

Section: The Interplay Of Neoliberal Globalisation and Postsocialist mentioning

confidence: 99%

Signalling Demand for Foreign Investment: Postsocialist Countries in the Global Bilateral Investment Treaties Network

Bandelj

Mahutga

Shorette

2015

Europe-Asia Studies

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A unique dataset on bilateral investment treaties provides a novel source of evidence on the link between neoliberal globalisation and market transition. We argue that postsocialist countries of Europe and Eurasia, more than other developing regions in the world, signed such treaties to signal demand for foreign investment in the spirit of neoliberalism. We calculated the density of the whole BIT network since its inception in 1959 to 2009, and density and centrality of different regional blocks within it, and found strong support for our argument. Yet, even if bilateral investment treaties are designed to promote foreign direct investment, dynamic panel regression models show that signing them does not automatically translate into foreign direct investment inflows for postsocialist European and Eurasian countries in the 1990-2010 period.

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The Long‐Term Effects of Foreign Investment Dependence on Economic Growth, 1940–1990

Cited by 156 publications

References 13 publications

The Global Economy as Instituted Process: The Case of Central and Eastern Europe

The Global Economy as Instituted Process: The Case of Central and Eastern Europe

Foreign Direct Investment and Economic Growth: New Evidence from Post-Socialist Transition Countries

Signalling Demand for Foreign Investment: Postsocialist Countries in the Global Bilateral Investment Treaties Network

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