This paper documents significant partisan divides across a range of corporate cultural values. Using panel data of 2,424 S&P 1500 firms spanning the period from 2001 to 2018, we find that firms whose top management teams lean toward the Democratic Party exhibit higher cultural values of integrity, teamwork, innovation, respect, and quality, in comparison with firms with executives leaning toward the Republican Party. In addition, we find that the partisan gap diminishes when firms have less entrenched management or locate in states with stronger judicial accountability. Our findings lend support to earlier research suggesting that leader characteristics are associated with corporate culture.

Business power is thought to increase over time when private actors are involved in the provision of public goods and services. This paper argues that this is partially true—and that in certain circumstances, state actors can even swiftly regain control of sectors previously ceded to private interests. When the latter fulfill some public functions on behalf or as delegates of the state, policymakers face ever greater pressures to sustain a relationship flawed by principal-agent problems—allowing business actors to derive appreciable political benefits. However, these conditions do not hold true after deregulation—when state actors retreat from a sector and attempt to direct the newly created market through licensing, norms, and standard setting. We demonstrate that deregulation sets the stage for a more competitive environment, making it harder for private interests to cooperate. This, in turn, can allow policymakers to enhance regulatory capacities and seize opportunities to highlight the shortcomings of private provision. After establishing this argument theoretically, we illustrate its implications through the comparative historical analysis of the health insurance sector in two European countries—Belgium and France. Despite their initial similarities, they experience contrasting developments regarding the welfare state’s dependency on private insurers for the provision of crucial collective goods.

There is a consensus in the finance literature that stock markets generally perform well ahead of holidays. However, I argue that this relationship does not hold in the Chinese context, given that public holidays are associated with increased collective action and repression. I propose two possible mechanisms: (1) Chinese investors take cues from the political environment and will thus act more conservatively in the market prior to public holidays or (2) the government increases intervention to stabilize the stock market during these periods. I test this relationship using daily stock exchange data from Shanghai and Shenzhen. In addition, I corroborate the theoretical mechanism by testing whether there is similar conservatism before focal points on the dissident calendar. This research note contributes to our understanding of the Chinese investment market and raises general questions about the representativeness of the finance literature. In addition, this research speaks to the costs of authoritarianism and preserving social stability in these contexts.

The Regional Comprehensive Economic Partnership (RCEP) is one of the most important mega-regional trade agreements signed to date. Yet, it failed to include an Investor-State Dispute Settlement (ISDS) mechanism in its investment chapter. What explains this omission? To unpack this, we examine international negotiations as a two-step process. In the first stage, we theorize that initial preferences towards ISDS are based on countries’ orientation toward foreign direct investment (FDI), experience with ISDS, and past treaty practice. Second, we theorize that during protracted negotiations, adverse regime developments and domestic politics can have a profound impact on treaty design. To test our framework, we examine the RCEP negotiations. Our analysis shows that mounting cases as well as the eroding norm of ISDS in other treaties lowered support for ISDS as the negotiations progressed. Then, a change of government in Malaysia shifted that country’s position dramatically, which tipped the balance against ISDS in the final round of negotiations. Our findings have important implications for the international investment regime. They highlight the factors that determine countries’ initial preferences while also demonstrating the importance of developments during the negotiations, which can lead to the abandonment of the institutional status quo.

Political instability is commonly thought to discourage investment and reduce economic growth. We challenge this consensus by showing that instability does not systematically depress investment. Using an event study approach, we examine daily returns of national financial indices in every country that experienced an irregular regime change subject to data availability. Returns following resignations are large and positive (+4 percent), while those following assassinations are negative and smaller in magnitude (−2 percent). The impact of coups tends to be negative (−2 percent), but we show that a pro-business coup results in large positive returns (+10 percent). We also find evidence that authoritarian or anti-business regime changes are more likely to lead to capital flight than democratic or pro-business changes. The immediate impact of political instability on investment is therefore dependent on the type of regime change and its expected impact on future growth.

This paper explores the potential causal relationship between political orientation and education investment by using panel data from 21 OECD countries from 1970 to 2020 and utilizing estimators that address endogeneity (i.e. 2SLS, System GMM, and Lewbel 2SLS). In particular, using communist influence as a physical instrument for political orientation, we find a positive impact of the right political orientation on education investment, and the impact of the left orientation is negative. The positive impact from the right orientation is also stronger than the negative impact from the left. Moreover, these core results are robust to alternative measures of political orientation and education investment, alternative estimators that address endogeneity, and the moderation effect of innovation.

Under what conditions do countries lose their status as the leading global financial center? Some scholars argue that such shifts follow shortly after transitions in the distribution of other key capabilities (e.g. GDP), while others argue that path dependence or other more bespoke capabilities might be able to sustain financial leadership long after decline in other capabilities. This paper aims to understand the causes of the Anglo-American financial transition. I argue that the ability to manage political risk for investors is critical to the position of countries as financial entrepôts. In the case of British financial leadership, I argue that Britain’s position as an entrepôt hinged on its power projection capability, which enabled Britain to limit political risk for investors in ways that other states could not replicate. The gradual loss of those capabilities, in turn, saw Britain eventually become overshadowed by the United States. I support my claims with a TERGM analysis of the interwar sovereign debt network.

The Japan–Korea whitelist dispute (2019–2023) embodies key features of interstate disputes related to economic statecraft ideas. Against the backdrop of the legal dispute over Japan’s “essential security interests” claim based on GATT Article 21 (Security Exceptions), this study analyzes South Korea’s response to the whitelist dispute, with a focus on its materials–parts–equipment localization policy. The findings indicate that the policy process and outcomes align with very few of the criteria suggested by the new industrial policy literature. Notably, the policy’s goals and tools were driven by ideology rather than by science, and the implementing agency—The Ministry of Trade, Industry, and Energy—while competent, was politically captured. In conclusion, this study suggests that policymakers should purposefully and consciously connect security with trade or implement industrial policies within a well-defined strategic framework.

This study identifies the core of Korea’s economic statecraft as (1) diversification of the supply chain of high-tech industries to proactively mitigate vulnerability to economic coercion, (2) the pursuit of technological sovereignty to increase self-sufficiency in advanced technologies, (3) governance reforms to strengthen supply chain resilience, and (4) industrial policies to enhance the competitiveness of advanced industries. The four strategies mentioned above all have in common that they are predicated on the strategic utilization of high technology. Based on these traits, I define Korea’s new economic security strategy as techno-economic statecraft. Korea’s techno-economic statecraft has two features. First, Korea utilizes high technology as a nexus between economy and security. Second, Korea uses high technology as a nexus to link domestic and foreign policies.