Foreign Direct Investment And Militarized Interstate Conflict
- Topics:
- Foreign Direct Investment
- Tags:
- Currency & Foreign Exchange,
- Finance,
- Foreign Direct Investment,
- Foreign Direct Investment (FDI),
- Investment,
- University Of Iowa
- Source:
- University of Iowa
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Overview: Liberal peace theorists identify that increased Foreign Direct Investment (FDI) promotes peace by dissipating private information, increasing opportunity costs of conflicts, and providing alternative form of extracting wealth. Unfortunately, few studies have explained how FDI solves the 'Externality' problem between countries and what significant roles it plays in domestic politics for countries not to engage in interstate conflicts. Thus, this study suggests two mechanisms concerning the questions: First, FDI overcomes relative gains problem through an "Upstream" effect that both home and host countries benefit together, and trade increase; second, it constrains states' leaders from resorting to military conflicts through directly influencing their political survival, imposing structural constraints, and pressing interest groups.
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Format: PDF | Size: 423KB | Date: Aug 2005 | Pages: 35
