How FDI reshapes host markets’ trade profile and politics
Name
American J Political Sci - 2025 - Kim - How FDI reshapes host markets trade profile and politics.pdf
Description
Published version
Size
642.29 KB
Format
Adobe PDF
Checksum (MD5)
aec6278244da230dadf7a93ee0c77922
Author(s)
Kim, In Song
Liao, Steven
Miyano, Sayumi
Date Issued
September 12, 2025
Journal
American Journal of Political Science
Publisher
Wiley
Citation
Kim, In Song, Steven Liao, and Sayumi Miyano. 2025. “ How FDI reshapes host markets’ trade profile and politics.” American Journal of Political Science 1–18.
Version
Final published version
Abstract
A fast-growing literature indicates that firms’ engagement in foreign directinvestment (FDI) and trade is key to understanding deepening global valuechains and their political implications. However, existing studies have mainlyfocused on the ramifications for FDI home countries while often overlookingthe firm-product level interactions between FDI and trade, where their inter-dependencies manifest. This study examines how firms’ FDI reshapes hostcountries’ trade profiles at this level, empowering new political coalitions fortrade liberalization. Analyzing greenfield FDI projects globally since 2003, wefind that hosts experienced an average increase of over 45 export products inthe following year. To overcome the challenges of connecting firms to prod-ucts, we link FDI data with Vietnamese customs records. We find that Viet-namese export (import) volumes of FDI-related products increased by 90%(30%) within 4 years of initial investments. Importantly, these products alsobenefited from more substantial tariff cuts in bilateral Free Trade Agreements.
MIT Department
Massachusetts Institute of Technology. Department of Political Science
Terms of Use
Creative Commons Attribution
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1111/ajps.70010
