The Impact of the Great Recession on Attitudes toward Foreign Capital Investment

• In Event: 3555 - Section on the Political Economy of the World-System Refereed Roundtables (1 hour)
  In Refereed Roundtable 60min: 1. Economy and Inequality in Contemporary Capitalism

Abstract

Foreign capital investment has become a primary dimension of economic globalization. In the aftermath of the Great Recession, rising public support for protectionist policies has challenged free trade and foreign investment inflows in affluent democracies. However, scholarly research to date has little paid attention to the connection between the economic crisis and public attitudes toward foreign capital investment. In this paper, I extend the logic of competitive threat theory—which contends that rising competition between native workers and immigrants for scarce resources intensifies public anxiety about immigrants—from the study of attitudes toward immigrants to attitudes toward investment of foreign capital. Specifically, this research examines the effect of the Great Recession on perceived foreign capital threat (PFCT). I use a multilevel ordered logit model to capture Level-2 structural determinants of Level-1 PFCT across 22 countries. Level-1 dependent variables are derived from the 2013 International Social Survey Program: National Identity. The key Level-2 independent variable is the Great Recession Index, which is comprised of four strands of distinct, but interrelated indicators of the economic crisis: the housing crash, the financial crisis, the economic decline, and the employment loss. I find the little direct evidence for competitive threat theory for the impact of the Great Recession on PFCT, but the interaction analyses provide several indirect evidence for competitive threat theory by showing that the impact of the Great Recession is contingent on several structural and sociodemographic factors. This paper contributes to an understanding of the cross-national variation in the causal connections between the Great Recession and anti-foreign capital attitudes.

Author

• Joonghyun Kwak, The Ohio State University