TY  - JOUR
PY  - 2017//
TI  - Investing in violence: foreign direct investment and coups in authoritarian regimes
JO  - Journal of politics
A1  - Tomashevskiy, Andrey
SP  - 409
EP  - 423
VL  - 79
IS  - 2
N2  - Why do foreign investors invest in authoritarian regimes despite higher political risks? In this paper, I evaluate the relationship between foreign direct investment (FDI), coups, and political risk. I develop a formal model of leadership dynamics in authoritarian regimes and examine how the initial investment decision by foreign investors is affected by expected likelihood of coups. Using the formal model, I discriminate between diverging predictions made by the "greed" and "patronage" models of authoritarian regime dynamics. Accounting for both the "greed" and "patronage" mechanisms, I demonstrate that patronage effects predominate and that increasing FDI reduces the risk of a coup. Investors are more likely to send larger FDI amounts to authoritarian states when coup risk is high to increase the likelihood of a peaceful patronage equilibrium. Using a large-n test, I find that FDI reduces the likelihood of coups, while higher coup risk is associated with increased FDI in less mobile sectors.<p />  <p>Language: en</p>
LA  - en
SN  - 0022-3816
UR  - http://dx.doi.org/10.1086/688356
ID  - ref1
ER  -