Vol. 42, No. 3-4 (Fall-Winter 2017)
Autocratic Leadership Turnover and Foreign
Direct Investment: Empirical Analysis
J. Weston Jamison
Chika Yamamoto Rosenbaum
What explains the variation in the amount of foreign direct investment (FDI) flowing into autocratic nations? This paper advances the current understanding of the relationship between autocratic regimes and FDI by analyzing how different types of autocratic leadership turnovers affect inward FDI. We argue that the amount of net FDI inflows depends on the types of leadership turnover in autocratic states due to different levels of political risks surrounding the hosting nations experiencing these changes. We particularly theorize that the amount of FDI tends to decrease when autocratic leaders exit irregularly rather than regularly. In addition, the negative effect of an irregular exit of autocratic leader appears to be stronger in the cases of assassination than when leaders are removed through non-foreign supported events such as coups d’état and civil wars. Our empirical analysis based on 102 autocratic countries over the 34 years supports these claims.