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Transnational Corporations and Repression of Political Rights and Civil Liberties: An Empirical Analysis

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  • Matthias Busse

Abstract

Transnational Corporations are often accused by non-governmental organisations of ignoring fundamental democratic rights, such as civil liberties and political rights, in the countries of their investments. This paper attempts to explore empirically the complex relationship between foreign investment and democracy in a systematic way, using different econometric techniques. In contrast to the public discussion over recent years and the view held by non-governmental organisations, the results show that enhanced democratic rights are associated with higher foreign investment in the 1990s. Interestingly, this positive link does not hold for the 1970s and 1980s, when a substantial portion of foreign investment went to countries with repressive governments. Copyright WWZ and Helbing & Lichtenhahn Verlag AG 2004.

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  • Matthias Busse, 2004. "Transnational Corporations and Repression of Political Rights and Civil Liberties: An Empirical Analysis," Kyklos, Wiley Blackwell, vol. 57(1), pages 45-65, February.
  • Handle: RePEc:bla:kyklos:v:57:y:2004:i:1:p:45-65
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    1. Sebastian Edwards, 1990. "Capital Flows, Foreign Direct Investment, and Debt-Equity Swaps in Developing Countries," NBER Working Papers 3497, National Bureau of Economic Research, Inc.
    2. Robert E. Lipsey, 1999. "The Location and Characteristics of U.S. Affiliates in Asia," NBER Working Papers 6876, National Bureau of Economic Research, Inc.
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