Date of Award


Document Type

Campus Access Dissertation


Political Science

First Advisor

Harvey Starr


Since the 1970s, a rapid growth of foreign direct investment (FDI) and the rising prevalence of multinational corporations (MNCs) in the global economy have been remarkable phenomena and invoked fervent debates and controversies. Although trade-conflict relationship has been widely discussed by political scientists, FDI-conflict relationship has not induced enough attention it deserves in international relations.

This goal of this dissertation is to explore the issues regarding the possibly pacifying effects of FDI on conflict, claimed by liberals. By focusing on the interactions between MNCs and nation-states, this dissertation examines the FDI-conflict linkages by raising two questions: (1) Under what conditions does conflict affect FDI? (2) To what extent does FDI influence conflict?

For the first question, I argue that FDI's sensitivity to conflict varies significantly, depending on various types of conflict and different sectors of industry. As for the second question, at the monadic level, I argue that a state pursues peace by sending out pro-FDI signals, which reveals the unwillingness of the state to initiate conflict. At the dyadic level, I argue that symmetrical FDI interdependence and shared pro-FDI policy have significantly pacifying effects on conflict. Nevertheless, the pacifying effects of the above two factors vary considerably in different dyads of state combinations (e.g., developed vs. developing countries).

This dissertation adopts various statistical models to undertake empirical analysis. The data cover the period from 1970 to the 2001. The findings largely support my arguments and suggest that a higher level of shared protection of property rights and symmetrical FDI interdependence in a dyad of states are likely to be the promising force of peace.


© 2010, Yi-Hung Chiou