Reciprocity and Public Opposition to Foreign Direct Investment

Abstract

Prior International Political Economy (IPE) public opinion research has primarily examined how economic and socio-cultural factors shape individuals’ views on the flows of goods, people, and capital. What has largely been ignored is whether individuals also care about rewarding or punishing foreign countries for their policies on these subjects. To test this possibility, we administered a series of conjoint and traditional survey experiments in the United States and China that examined how reciprocity influences opposition to foreign acquisitions of domestic companies. We find that reciprocity is an important determinant of public opinion on the regulation of foreign investments. This suggests the need to consider the policies that other countries adopt when trying to explain public attitudes towards global economic integration.

Keywords: International Political Economy; Foreign Direct Investment; Mergers & Acquisitions; Reciprocity; Public Opinion; Survey Experiments