The Conditional Nature of Political Risk: How Home Institutions Influence the Location of Foreign Direct Investment

What determines whether countries' institutions attract or deter investment? Although existing theories predict that multinational enterprises (MNEs) avoid locations where institutions cannot constrain public and private actors' opportunistic behavior, we argue host institutions' attractiveness depends on firms' home environment. Home country institutions shape firms' practices and capabilities, thus helping to determine the environments that firms are best prepared to face abroad. We test our predictions using multiple data sets at different levels of analysis: firm‐level data on MNEs' foreign subsidiaries, data on bilateral foreign direct investment (FDI) positions, and longitudinal data on bilateral FDI flows. We find that states with independent judiciaries are particularly attractive to investment from countries also possessing independent courts. Similarly, countries with low judicial independence disproportionately send FDI to countries lacking independent judiciaries. These findings' implications challenge conventional wisdom: “Good” institutions may not attract all investors, and “bad” institutions may not always deter, as current research suggests.     

Revisiting the Feminist Debates on International Labor Standards in the Aftermath of Rana Plaza

This paper revisits the turn of the millennium feminist debates on international labor standards in the aftermath of the Rana Plaza factory collapse of 2013 that killed over 1100 garment workers in Bangladesh. Feminists were divided over the benefits of establishing internationally enforced labor standards and, more generally, on the usefulness of transnational activism and union organizing for garment workers. The arguments of some feminist opponents during and in the aftermath of the debate emphasized the relative advantages of garment jobs, dismissed the importance of union rights, and criticized the labor transnationalism. These arguments have left unchallenged the current regulatory regime in Bangladesh by allaying concerns about poor working conditions. Drawing upon new empirical evidence, the paper shows that export growth under the market regulatory regime has failed to improve labor conditions in the sector. The paper makes the case for the continuing relevance of feminist arguments that favor a more proactive stance to make job growth compatible with wage gains and improved labor conditions. As they argued, the scope of the response has to be international, including solidaristic activism supporting local worker organizations, and the use of wage increases to move Bangladesh on a development path toward a higher-productivity, higher-wage economy.