Title: Essays on the Political Economy of Foreign Direct Investment
Description: This dissertation studies the causes and consequences of inflows of foreign direct investment (FDI). The first chapter identifies and explains a skill bias in the sectoral composition of inward FDI in developing countries; that is, high-skill intensive FDI constitutes a large share of total FDI inflows in autocracies, while low-skill intensive FDI takes a relatively high proportion in democracies. In this chapter, I develop a political economy framework to explain the empirical pattern and argue that the skill bias is an outcome of the interaction between a country's underlying distribution of skills and the logic of political survival. Distinct institutional constraints drive political leaders in autocracies and democracies to adopt different policies toward these two types of FDI to extend benefits to their core constituencies, thus generating a skill bias in the sectoral composition of inward FDI across political regimes. Empirical evidence based on available sectoral FDI data in developing countries supports my argument.

To further illustrate the causal mechanisms, Chapter 2 briefly examines FDI policy in China and Taiwan. In Chapter 3, I employ a survey experiment implemented in China to examine the distributional effects of high-skill and low-skill intensive FDI derived in Chapter 1. The results suggest that respondents' skill level is positively and strongly associated with support for high-skill intensive FDI but has no significant effect on their support for low-skill intensive FDI. These findings provide support for the micro-foundations of the political economy framework developed in Chapter 1. Finally, Chapter 4 examines the relationship between economic integration and corruption in China. Using an original dataset of corruption cases to measure corruption at the provincial level, I find that economic integration leads to a high level of corruption in China. This finding runs counter to the conventional wisdom that economic integration helps reduce corruption and thus has important implications for both domestic and global governance.

Taken together, this dissertation aims to provide more nuanced accounts of the causes and consequences of FDI inflows.