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Property Rights Regimes, Technological Innovation, and Foreign Direct Investment

  • Mark David Nieman and Cameron G. Thies
Abstract

We argue that democratic institutions influence property rights in attracting foreign direct investment (FDI) by providing: (1) a coherent logic to the property rights regime that is created in a state and (2) a legitimate way to manage conflicts that arise in dynamic economies. We expect that the marginal effect of property rights in attracting FDI has increased over time with the rate of technological dynamism. We test this using a non-nested multilevel modeling strategy with random coefficients on data from 1970 to 2009. Our results demonstrate that the effect of property rights on attracting FDI is contingent on democratic institutions and that this effect becomes more pronounced over time. This effect holds for both developing and developed countries across all regions.

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Mark David Nieman, Assistant Professor, Department of Political Science, Iowa State University, 537 Ross Hall, Ames, IA 50011 (mdnieman@iastate.edu). Cameron G. Thies, Professor, School of Politics and Global Studies, Arizona State University, 6748 Lattie F. Coor Hall, Tempe, AZ, 85287 (cameron.thies@asu.edu). The authors would like to thank Guy Whitten and the participants of the “Innovations in Comparative Methodology” conference hosted by the European Union Center at Texas A&M University. They give special thanks to Vera Troeger for her editorial guidance and to the three anonymous reviewers. To view supplementary material for this article, please visit https://doi.org/10.1017/psrm.2017.46

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