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The impact of inward foreign direct investment bans on the configuration of global value chains

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  • Buckley, Peter J.
  • Hashai, Niron

Abstract

Using a simple model, we analyse the effects on the global economy of unilaterally banning inward FDI (IFDI). Unilateral bans on IFDI may provoke retaliation from other countries (bilateral FDI ban), which further disrupts the global system. The most striking, unintended consequence of banning inward FDI revealed by our model is that in the scenario where both advanced and emerging countries impose bilateral inward FDI bans, the former gain little from banning inward FDI and bear the risk of losing much to the latter. This result is mainly driven by the prohibition on advanced country MNEs locating production activities of technology intensive products in emerging countries.

Suggested Citation

  • Buckley, Peter J. & Hashai, Niron, 2026. "The impact of inward foreign direct investment bans on the configuration of global value chains," International Business Review, Elsevier, vol. 35(2).
    • Handle: RePEc:eee:iburev:v:35:y:2026:i:2:s0969593126000065
    DOI: 10.1016/j.ibusrev.2026.102562
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