Field Research When There Is Limited Access to the Field: Lessons From Japan (forthcoming in PS: Political Science & Politics)
(with Kenya Amano, Melanie Dominguez, Timothy Fraser, Etienne Gagnon, Trevor Incerti, Jinhyuk Jang, Charles T. McClean, Austin Mitchell, Colin Moreshead, Harunobu Saijo, Diana Stanescu, Ayumi Teraoka, Charmaine Willis, Yujin Woo, Hikaru Yamagishi, and Charles Crabtree.)
Regime Complexity and Overlapping Information: The Case of Energy Projections
One of the critical functions of international organizations (IO) is to provide information. However, instead of always conveying all the information they have, IOs strategically select which information to provide. How does existence of competitors, a common factor under overlapping institutions today, affect IO’s function to provide information? While the literature has debated whether overlapping institutions encourage or hinder better rule-making and compliance, this paper looks at a less-studied aspect of this consequence: IO’s role as an information provider. I first develop a model to argue that entries of additional IOs help motivate the incumbent IOs to reveal more information when the information is verifiable type. Yet the model predicts that there are also cases where overlapping institutions hinder information transmission – for less verifiable types of information, entries of new IOs may not encourage incumbent IOs to convey full information as they foster competition over support from domestic actors. I illustrate this with a case of overlapping institutions providing energy projections, such as the International Energy Agency (IEA), using text and numeric data of energy outlooks and policy papers they published. Moreover, through an analysis of U.S. governmental documents citing the IEA and other energy organizations, I show that, upon entries of competing IOs, the context in which incumbent IO’s information is cited became even more biased toward those on conventional energy. This supports the mechanism that domestic actors shape the incentives these IOs hold over their information provision.
Why Trade and FDI Should Be Studied Together (paper)
(with In Song Kim and Steven Liao)
Global value chains have knit trade and foreign direct investment (FDI) together as firms' engagement in one activity inextricably depends on the other. Yet, most IPE scholarship fails to consider the two simultaneously. We offer an integrated theory that explains why trade’s distributional consequences depend on firms' strategic decisions about FDI. Combining customs data on Vietnamese firms' exports and imports with FDI data on MNCs' greenfield projects in Vietnam since 2003, we find that FDI substantially altered Vietnam’s subsequent trade profiles. Compared to similar products, Vietnamese exports (imports) of products related to FDI increased by 100% (40%) within four years of initial investments. We also find that these products enjoyed deeper tariff cuts in the recent bilateral trade agreement between Vietnam and South Korea. These findings suggest that multinational firms not only affect the composition of trade but also create new political cleavages in trade politics that go beyond country borders.
How Bureaucratic Networks Shape Market Access: The Effect of Revolving Door Connections on FDI and Trade of Japanese Firms
(with Diana Stanescu)
How do firms address difficulties in running businesses abroad and make foreign direct investment (FDI) decisions? Research in the politics of FDI highlights that political conditions in the destination market (host government characteristics) or the nationality of firms affect firms’ decisions to invest abroad. This paper argues that ties with the home government, which vary at the firm level, also impact firms’ FDI strategies. In particular, we argue that home state–business relations shaped by revolving door hiring encourage firms’ business abroad via two mechanisms. First, they bring access to information and resources that help firms navigate through bureaucratic regulatory procedures abroad. Second, home bureaucrats help firms build connections with the host government that give the firm a better sense of protection against future expropriation risks. We test this theory using micro-level data from Japan—a country that, in 2009, passed civil service reforms that mandate public reporting of the re-employment of all retired civil servants. We use this information to retrieve the full network of bureaucracy–firm connections built through revolving-door employment for the period 2009–2017. We combine this novel data with a firm-level business activity survey conducted by the Japanese government, covering the basic characteristics, subsidiaries, and investment activities of 24,870 Japanese firms. We find that firms with more bureaucratic ties are indeed more likely to invest abroad. Our interviews with governmental officials and business representatives show support for the proposed mechanisms. The findings imply that even within the same nationality or productivity level, firms with ties to home bureaucrats are more successful in doing business abroad.
Following Peers and Competitors: How Business Managers Evaluate Firm Withdrawals from Russia (paper)
(with Christina Davis and Jialu Li)
States have long used economic sanctions in response to violations of international law as a strategy to restore order. Increasingly, we also observe firms that reject doing business with violators. In response to the war in Ukraine, hundreds of multinational corporations (MNCs) voluntarily withdrew from Russia, even when policymakers were still debating the extent of sanctions. Why did private firms halt their business? We argue that peer pressure and competition generate a strategic interaction in the response of firms to international crises. We test our hypotheses with a survey experiment on Japanese firm managers conducted within the first few months of the Russian invasion of Ukraine. First, we find that news about withdrawal by other firms creates peer pressure and increases support for firm withdrawal. Withdrawal by firms from a diverse range of countries has a larger impact. Second, we find that news about some firms continuing business with the sanction target generates competition concerns and lowers support for firm withdrawal. Our research provides insight into why business actors take political stances during international conflicts.