Does FDI Matter? Assessing How Foreign Direct Investment Impacts the Geography of Defense Spending
Journal: Knowledge@UChicago (University of Chicago)
Year: 2021

What is the relationship between the level of economic interdependence among states and the geography of defense spending? I argue that as the level of economic interdependence in a region increases, the geographic structure of defense spending weakens. States in a highly interdependent system will have defense expenditures that correlate weakly to the defense expenditures of nearby states. Conversely, in a less interdependent system, states with high defense expenditure are more likely to be lo