Soft, hard or smart power? International students and investments abroad

This paper analyses the impact of education networks on the FDI from the United States and United Kingdom in 167 countries during 1999-2011. Proxies of networks are international students in the US and UK and alumni associations abroad. Results show that education networks boost the British FDI, while their influence on American FDI is weak, except for foreign students of the Cold War period and alumni associations. The gap is partly explained by the different political and economic roles played by the US and UK on the world stage. Results are robust to different econometric specifications.