The Impact of Armed Conflict on Inward Foreign Direct Investment (FDI): An Analysis of Conflict Over Government, Conflict Over Territory, and FDI

Authors

Miao Grace Wang, Marquette UniversityFollow
M.C. Sunny Wong, University of Houston
Hong Zhuang, Indiana University South Bend
Reinhard Cate, University of San Francisco

Document Type

Article

Publication Date

2024

Publisher

Taylor & Francis (Routledge)

Source Publication

Global Economic Review

Source ISSN

1226-508X

Original Item ID

DOI: 10.1080/1226508X.2024.2305468

Abstract

We examine the relationship between armed conflict and foreign direct investment (FDI) in host countries. With data from 113 nations from 1984 to 2014, system GMM and macro-panel CCEMG estimators show that intrastate armed conflict decreases FDI in conflict-ridden hosts. Further, we distinguish two types of armed conflict – conflict over government and conflict over territory. Conflict over government has significant short-term and long-term negative impacts on FDI, while the effect of territorial conflicts appears insignificant. Our results also suggest that armed conflict's harmful impact on FDI mainly occurs in middle- and low-income host countries.

Comments

Global Economic Review, Vol. 53, No. 1 (2024): 25-51. DOI.

Recommended Citation

Wang, Miao Grace; Wong, M.C. Sunny; Zhuang, Hong; and Cate, Reinhard, "The Impact of Armed Conflict on Inward Foreign Direct Investment (FDI): An Analysis of Conflict Over Government, Conflict Over Territory, and FDI" (2024). Economics Faculty Research and Publications. 653.
https://epublications.marquette.edu/econ_fac/653