This research reveals the inherent dynamics between the amount of foreign direct investment (FDI) inflow in the host country and its political relationships with other countries. We demonstrate in a two-stage sequential game model that there exists an inverted U-shape relationship between FDI...

This paper constructs a two-stage sequential game model to investigate the spillover effect of inward FDI on the efficiency improvement of domestic firms across different ownership types in host countries. Our model shows that given the optimal spillover policy made by foreign firms, the impact...

In this paper, we demonstrate in a two-stage sequential game model that there exists an inverted U-shape relationship between FDI inflow and bilateral political relations. Employing the political relationship index (PRI) to test our theory using Chinese data from 2002 to 2016, we find that the...