IDEAS home Printed from https://ideas.repec.org/p/osf/osfxxx/tm82g.html
   My bibliography  Save this paper

Varieties of state capital: What does foreign state-led investment do in a globalized world?

Author

Listed:
  • Babic, Milan

    (University of Amsterdam)

  • Dixon, Adam
  • Fichtner, Jan

    (University of Amsterdam)

Abstract

Existing studies have scrutinized the rise of states as global owners and investors, yet we still lack a good understanding of what state-led investment does in a globalized economy, especially in its host states. Comparative capitalisms research has analyzed foreign state investment as a potential source of patient capital for coordinated and mixed market economies. However, this patient capital framework cannot explain the recent surge of protectionist sentiments, even among the ‘good hosts’ of state-led investment. Therefore, we extend the patient capital argument and develop a broader framework centered on the globalized nature of foreign state investment. We create and empirically illustrate a novel typology based on different modes of cross-border state investment – from financial to strategic – and different categories of host states. Our results provide a new pathway to study the rise and effects of cross-border state investment in the twenty-first century.

Suggested Citation

  • Babic, Milan & Dixon, Adam & Fichtner, Jan, 2021. "Varieties of state capital: What does foreign state-led investment do in a globalized world?," OSF Preprints tm82g, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:tm82g
    DOI: 10.31219/osf.io/tm82g
    as

    Download full text from publisher

    File URL: https://osf.io/download/6102e4ecb2d3320027ff9d63/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/tm82g?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Trebesch, Christoph & Gelpern, Anna & Horn, Sebastian & Morris, Scott & Parks, Bradley, 2021. "How China Lends: A Rare Look into 100 Debt Contracts with Foreign Governments," CEPR Discussion Papers 16331, C.E.P.R. Discussion Papers.
    2. Thatcher, Mark & Vlandas, Tim, 2016. "Overseas state outsiders as new sources of patient capital: government policies to welcome sovereign wealth fund investment in France and Germany," LSE Research Online Documents on Economics 84497, London School of Economics and Political Science, LSE Library.
    3. Helen Callaghan, 2015. "Something left to lose? Network preservation as a motive for protectionist responses to foreign takeovers," Review of International Political Economy, Taylor & Francis Journals, vol. 22(2), pages 391-418, April.
    4. Manuel Agosin & Roberto Machado, 2005. "Foreign Investment in Developing Countries: Does it Crowd in Domestic Investment?," Oxford Development Studies, Taylor & Francis Journals, vol. 33(2), pages 149-162.
    5. Daniel Haberly, 2014. "White Knights from the Gulf: Sovereign Wealth Fund Investment and the Evolution of German Industrial Finance," Economic Geography, Clark University, vol. 90(3), pages 293-320, July.
    6. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147.
    7. Sophie Meunier, 2014. "A Faustian bargain or just a good bargain? Chinese foreign direct investment and politics in Europe," Asia Europe Journal, Springer, vol. 12(1), pages 143-158, March.
    8. Daniel Haberly, 2014. "White Knights from the Gulf: Sovereign Wealth Fund Investment and the Evolution of German Industrial Finance," Economic Geography, Taylor & Francis Journals, vol. 90(3), pages 293-320, July.
    9. Gordon L. Clark & Adam D. Dixon & Ashby H. B. Monk, 2013. "Sovereign Wealth Funds: Legitimacy, Governance, and Global Power," Economics Books, Princeton University Press, edition 1, volume 1, number 10003.
    10. Alvaro Cuervo-Cazurra, 2018. "Thanks but no thanks: State-owned multinationals from emerging markets and host-country policies," Journal of International Business Policy, Palgrave Macmillan, vol. 1(3), pages 128-156, December.
    11. Milan Babic & Javier Garcia-Bernardo & Eelke M. Heemskerk, 2020. "The rise of transnational state capital: state-led foreign investment in the 21st century," Review of International Political Economy, Taylor & Francis Journals, vol. 27(3), pages 433-475, May.
    12. Zilberman, David & Hochman, Gal & Kaplan, Scott & Kim, Eunice, 2014. "Political Economy of Biofuel," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 29(1), pages 1-6.
    13. Ashley Thomas Lenihan, 2014. "Sovereign Wealth Funds and the Acquisition of Power," New Political Economy, Taylor & Francis Journals, vol. 19(2), pages 227-257, March.
    14. Stephen B. Kaplan, 2016. "Banking unconditionally: the political economy of Chinese finance in Latin America," Review of International Political Economy, Taylor & Francis Journals, vol. 23(4), pages 643-676, July.
    15. Dixon, Adam D., 2014. "The New Geography of Capitalism: Firms, Finance, and Society," OUP Catalogue, Oxford University Press, number 9780199668243.
    16. Rawi Abdelal, 2013. "The profits of power: Commerce and realpolitik in Eurasia," Review of International Political Economy, Taylor & Francis Journals, vol. 20(3), pages 421-456, June.
    17. Christel Lane, 2003. "Changes in corporate governance of German corporations: convergence to the Anglo-American model?," Working Papers wp259, Centre for Business Research, University of Cambridge.
    18. Elie Cohen, 2007. "Industrial Policies in France: The Old and the New," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 213-227, December.
    19. Daniel Haberly & Dariusz Wójcik, 2017. "Earth Incorporated: Centralization and Variegation in the Global Company Network," Economic Geography, Taylor & Francis Journals, vol. 93(3), pages 241-266, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alvaro Cuervo-Cazurra & Anna Grosman & Geoffrey T. Wood, 2023. "Cross-country variations in sovereign wealth funds’ transparency," Journal of International Business Policy, Palgrave Macmillan, vol. 6(3), pages 306-329, September.
    2. Alvaro Cuervo-Cazurra & Anna Grosman & William L. Megginson, 2023. "A review of the internationalization of state-owned firms and sovereign wealth funds: Governments’ nonbusiness objectives and discreet power," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(1), pages 78-106, February.
    3. Bulfone, Fabio, 2020. "The political economy of industrial policy in the European Union," MPIfG Discussion Paper 20/12, Max Planck Institute for the Study of Societies.
    4. Imogen T. Liu & Adam D. Dixon, 2021. "Legitimating State Capital: The Global Financial Professions and the Transnationalization of Chinese Sovereign Wealth," Development and Change, International Institute of Social Studies, vol. 52(5), pages 1251-1273, September.
    5. Maj Grasten & Leonard Seabrooke & Duncan Wigan, 2023. "Legal affordances in global wealth chains: How platform firms use legal and spatial scaling," Environment and Planning A, , vol. 55(4), pages 1062-1079, June.
    6. Braunstein, Jürgen, 2017. "Understanding the politics of bailout policies in non-Western countries: The use of sovereign wealth funds," LSE Research Online Documents on Economics 68472, London School of Economics and Political Science, LSE Library.
    7. Rasoulian Mohsen & Ghannadi Ali Akhavan & Nojoomi Alireza, 2018. "Risk Taking of Life Insurance Companies from the Perspective of Senior Managers and Experts," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 6(1), pages 144-151, October.
    8. Nicholas Jepson, 2021. "Hidden in Plain Sight: Chinese Development Finance in Central and Eastern Europe," Development and Change, International Institute of Social Studies, vol. 52(5), pages 1222-1250, September.
    9. Caroline E Nowacki & Ashby Monk & Bertrand Decoster, 2021. "Who do sovereign wealth funds say they are? Using structural topic modeling to delineate variegated capitalism in their official reports," Environment and Planning A, , vol. 53(4), pages 828-857, June.
    10. Jayashankar, Priyanka & Ashta, Arvind & Rasmussen, Mark, 2015. "Slow money in an age of fiduciary capitalism," Ecological Economics, Elsevier, vol. 116(C), pages 322-329.
    11. Serafini, Giovanni O. & Szamosi, Leslie T., 2015. "Five star hotels of a Multinational Enterprise in countries of the transitional periphery: A case study in human resources management," International Business Review, Elsevier, vol. 24(6), pages 972-983.
    12. Daniel Haberly & Dariusz Wójcik, 2015. "Regional Blocks and Imperial Legacies: Mapping the Global Offshore FDI Network," Economic Geography, Clark University, vol. 91(3), pages 251-280, July.
    13. Stephen B. Kaplan, 2018. "The Rise of Patient Capital: The Political Economy of Chinese Global Finance," Working Papers 2018-2, The George Washington University, Institute for International Economic Policy, revised Jul 2018.
    14. Muyang Chen, 2021. "China–Japan development finance competition and the revival of mercantilism," Development Policy Review, Overseas Development Institute, vol. 39(5), pages 811-828, September.
    15. Carney, Michael & Estrin, Saul & Liang, Zhixiang & Shapiro, Daniel, 2022. "Are Latin American business groups different? An exploratory international political economy perspective," LSE Research Online Documents on Economics 111821, London School of Economics and Political Science, LSE Library.
    16. Ajit Singh, 2003. "Capital account liberalisation, free long-term capital flows, financial crises and economic development," Chapters, in: Philip Arestis & Michelle Baddeley & John S.L. McCombie (ed.), Globalisation, Regionalism and Economic Activity, chapter 1, pages 15-46, Edward Elgar Publishing.
    17. Njangang Henri & Nembot Ndeffo Luc & Nawo Larissa, 2019. "The Long‐run and Short‐run Effects of Foreign Direct Investment on Financial Development in African Countries," African Development Review, African Development Bank, vol. 31(2), pages 216-229, June.
    18. Girardone, Claudia & Kokas, Sotirios & Wood, Geoffrey, 2021. "Diversity and women in finance: Challenges and future perspectives," Journal of Corporate Finance, Elsevier, vol. 71(C).
    19. Bruno Amable & Donatella Gatti & Jan Schumacher, 2006. "Welfare-State Retrenchment: The Partisan Effect Revisited," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(3), pages 426-444, Autumn.
    20. Nathalie Greenan & Ekaterina Kalugina & Emmanuelle Walkowiak, 2014. "Has the quality of working life improved in the EU-15 between 1995 and 2005?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(2), pages 399-428.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:osfxxx:tm82g. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://osf.io/preprints/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.