Multinational Corporations and Government Treatment: Measurement, Theory, and Evidence

Abstract

This dissertation studies how foreign firms are treated by their host governments. I begin by proposing a sophisticated approach to measure the level of regulatory barriers imposed by major economies in the world on foreign investors. Next, I revisit a large and influential body of literature on the politics of foreign direct investments to show the scope of our existing knowledge. In particular, I formalize a theory to extend our theoretical framework on asset mobility, a fundamental concept in the literature. The theory demonstrates the duality of asset mobility, and that the classic theory only captures one side of asset mobility’s dual nature. I then conduct three empirical studies to evaluate the theoretical claims: an observational study using Chinese firm-level data, an observational study using data from firms in 47 countries, and a survey/survey experiment fielded in China. Overall, the dissertation makes several attempts to nuance our understanding of the government-business relationship in this era.