The Big Screen: Mapping the Diffusion of Foreign Investment Screening Mechanisms

19 Pages Posted: 27 Sep 2021

See all articles by Sarah Bauerle Danzman

Sarah Bauerle Danzman

Sophie Meunier

Princeton University - Princeton School of Public and International Affairs

Date Written: August 28, 2021

Abstract

In the decade following the 2008 financial crisis, many advanced industrialized economies engaged in a competition to attract Foreign Direct Investment (FDI), whose flows had plummeted following the global shock. At the same time, however, they also implemented or tightened Investment Screening Mechanisms (ISMs), which empower governments to restrict foreign takeovers, especially in strategic sectors. ISMs are an understudied phenomenon in the International Political Economy literature. This research note describes patterns in the evolution of foreign investment screening policies and suggests a research agenda for analyzing these patterns. After defining ISMs and establishing the puzzle of rising investment screening in conjunction with rising efforts to attract FDI, we present a newly coded dataset on ISMs in OECD countries from 2007-2021, examining the evolution of seven key features of investment screening over time. Next, we set an agenda for future research by suggesting three explanations for their recent evolution in the shadow of rising Chinese investment: the role of bottom-up backlashes to economic globalization; elite-driven foreign policy arguments about the increasingly blurred lines between national and economic security in the information economy; and geopolitical transformations that have challenged key features of the post-war liberal order.

Keywords: cfius, fdi, foreign investment, investment, ism, screening, investment screening

Suggested Citation

Bauerle Danzman, Sarah and Meunier, Sophie, The Big Screen: Mapping the Diffusion of Foreign Investment Screening Mechanisms (August 28, 2021). Available at SSRN: https://ssrn.com/abstract=3913248 or http://dx.doi.org/10.2139/ssrn.3913248

Sophie Meunier (Contact Author)

Princeton University - Princeton School of Public and International Affairs ( email )

Princeton University
Princeton, NJ 08544-1021
United States

No contact information is available for Sarah Bauerle Danzman

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