(iPoster) Female Politicians’ Signaling Effects and Foreign Investment Attraction

• In Event: Poster Session: International Political Economy I & Perspectives on Canadian Foreign Policy
  In Poster Session: Poster Session: International Political Economy I

Abstract

Do female politicians attract foreign direct investments (FDIs) inflow more in the United States? Despote the growing academic interest on female politicians, their impact on FDI inflows and local economy is underexplored. Building on existing knowledge on local protectionism, FDI attraction and gender in politics, we propose a threefold impact of female politicians. First, the existence of female governors and secretaries of state signals a less corrupted, more transparent business environment with fewer entry barriers, therefore attracting greater foreign direct investment inflows than their male counterparts. Second, the FDI promotion effect should be stronger among small foreign investors than large-scale firms, because the former group is more sensitive to business environment due to their relatively limited sources, connections and bargaining power. Finally, as some sectors have higher stakes for women’s interests than others, we also expect a greater FDI promotion effect in “feminist” sectors like education and healthcare. Using a panel dataset of 50 US states from 2003 to 2022, we find support for our hypotheses, Female governors and secretaries of state attract more foreign direct investment than their male counterparts, albeit concentrated in small-scale projects. However, we find no evidence that female politicians attract more FDI in health care and education, which indicates a need for further exploration. We aim to broaden understanding of the role female politicians play in shaping the local economy.

Authors

• Kexin Bai, Texas A&M University

• Zhaoqing Li, Texas A&M University