Sonal
S. Pandya
Assistant
Professor
Department
of Politics
University
of Virginia
spandya-AT-virginia.edu
Office:
Gibson 262
P.O.
Box 400787
Charlottesville,
VA 22904-4787
(p)
434-243-1573
(f)
434-243-3359
Publications
Working Papers
Democratization and
FDI Liberalization, 1970-2000
Foreign
direct investment (FDI) is at heart of global economic integration. It is the
single largest source of cross-border capital flows and generates a large share
of world trade.
Although
today countries offer all manner of enticements to attract FDI this represents
a dramatic reversal from the extensive FDI restrictions the prevailed in
previous decades. I argue that democratization prompted FDI liberalization as
leaders sought to curry favor with newly enfranchised voters, the primary
beneficiaries of FDI inflows. The centerpiece of my empirical analysis is an
original dataset on the incidence of foreign ownership regulations that spans
over 90 countries between 1970-2000.
I estimate that, on average, democracies restrict six percentage points
less of their overall economies relative to non-democracies. This finding is
robust to several possible alternate explanations for liberalization including
the exigencies of economic crises, the dictates of external creditors, and the
influence of peer countries. Further, I confirm that countries do not replace
formal restrictions with less transparent equivalents. Alternate measures of
democracy and instrumental variable regressions using years of independence as
an instrument for democracy address potential concerns about measurement and
omitted variable bias, respectively. This paper provides the first systematic
analysis of FDI regulation and fills a significant gap in international
political economy research.
French
Roast: Explaining Consumer Responses to the 2003 Iraq War (with Raj Venkatesan)
Many International Relations theories rest on
claims about individualsÕ responses to international events. To date, direct
test of these claims have relied exclusively on survey data. We identify a
behavioral response to foreign relations in AmericansÕ supermarket purchases
during the 2003 US-France dispute regarding Iraq. Our weekly store-level sales
data for 2500 supermarkets data span 2917 brands across twenty-two categories
of common grocery products. We identify which grocery products that, to US
consumers, appear to be French by virtue of a French-sounding brand
name. Our difference-in- difference estimates show that in weeks that boycotts
calls were more intense, the market share of seemingly French brands declined
relative to other brands. We verify our interpretation of this finding.
Robustness tests confirm no change in sales of French- owned trademarked
brands, no flight to American-sounding brands, and that rising gas prices did
not motivate consumption changes. Our study demonstrates the untapped potential
of consumer behavior as a metric of political sentiment.
Deal or No Deal:
The Rise of International Venture Capital Investment (with
David Leblang)
A growing
portion of foreign direct investment (FDI) flows takes the form of cross-border
flows of venture capital (VC). VC investors supply financing and
entrepreneurial expertise to new firms in exchange for equity. VC investors
apply their business acumen to raise firms' value, and then sell their equity
stake at a profit. Successful VC relies heavily on personal relationships,
intensive monitoring, and implicit information about the local market. These
facts make the emergence of cross-border venture flows puzzling. We argue that
cultural ties between countries, especially the rise of high-skilled migration
facilitate an international market for venture capital. Migrants bridge
information gaps across countries by supplying implicit information needed to
select foreign deals, and by advising entrepreneurs on the optimal business
strategy for the local market. We derive a model of cross-border venture
flows and test it with novel data on cross-border venture transactions covering
160 countries over the period 1980-2009. We find that US VC firms invest more
frequently in countries that have large populations of skilled migrants
residing in the US. In stark contrast to existing FDI research, we find that
recipient countriesÕ political institutions have limited influence over the
volume of venture capital deals. In this paper we highlight the international
flow of entrepreneurship and innovation, a substantively important dimension of
economic integration that political economy scholars have overlooked.
Additionally, we demonstrate the diversity of FDI as a form of economic
activity and correspondingly the need for more nuanced political economy models
of FDI.
Paper Borders:
Occupational Licensing as a Barrier to Physician Migration (with Brenton
Peterson and David Leblang)
Amid otherwise sharp disagreement over US
immigration policy there is an apparent consensus on the merits of skilled
migrants. Occupational licensing regulations (OLR) of skilled professions
suggest otherwise. We examine the effects of US statesÕ licensure requirements
for foreign-trained physicians on state inflows of migrant physicians. Using
original data on state licensing regulations between 1986 -2010 and detailed
migration data we show that states that require longer periods of supervised
practice receive fewer migrants. This finding is robust to controls for the
supply of physicians, co- ethnics, and physician co-ethnics and fixed effects
for year, origin country, and destination state. This research identifies a
form of domestic regulation that is a de facto barrier to the cross-country
mobility of human capital. Our findings also identify a possible source of
physician shortages, a significant stumbling block to universal health
coverage.