Dyadic Risk and Foreign Direct Investment

Foreign direct investment (FDI) has been rigorously examined by scholars of international business. While recent studies have achieved a general consensus with regard to the political and economic determinants of FDI inflows and outflows, this paper sought to reconcile two disparate segments of the literature – regime type and political climate – based upon recently available events data. The study ultimately failed to establish support for its hypothesis that bilateral political ties can substantively mitigate political risk to investment in states with autocratic regimes, but demonstrates a necessity to look beyond country-level political risk factors and further examine those of the dyad in making foreign investment decisions.