Brewing Violence: Foreign Investment and Civil Conflict

Pablo M. Pinto, Boliang Zhu

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

Two prominent features in current world affairs are the unprecedented level of global economic integration and the growing incidence of intrastate violence. We develop and test a novel argument linking global integration through foreign investment to intrastate armed conflict. The presence of multinational corporations in developing countries can cause market concentration, resulting in high rents. Disputes between governments and would-be challengers over the appropriation of these rents are likely to turn violent, increasing the incidence of armed conflict. State capacity mitigates this positive association between foreign investment and intrastate war. Strong states have the capacity to deter rebellions, address citizens’ demands through institutionalized mechanisms, and credibly commit to the peaceful resolution of conflicts. Using data from developing countries for over four decades and addressing potential endogeneity and selection biases, we find strong support for our hypotheses. Our findings have important implications for understanding the link between economic interdependence and conflict.

Original languageEnglish (US)
Pages (from-to)1010-1036
Number of pages27
JournalJournal of Conflict Resolution
Volume66
Issue number6
DOIs
StatePublished - Jul 2022

All Science Journal Classification (ASJC) codes

  • General Business, Management and Accounting
  • Sociology and Political Science
  • Political Science and International Relations

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