Domestic debates about trade have increased the salience of international economic cooperation among the public, raising the question of whether, and how, domestic support can be rallied in support of international trade agreements. We argue that institutional features of trade agreements provide important cues to domestic audiences that shape support, particularly the membership composition and voting rules for multilateral deals. We use two survey experiments to show that the US public is more supportive of trade when it is negotiated with like-minded countries. We also find that the voting rules shape support for trade agreements, but differently across partisan audiences. Republican voters strongly favor the home country having veto power, though this effect has diminished throughout President Trump's tenure, and Democrats prefer agreements with equal voting rules. These differences are largely driven by perceptions of the agreements benefit for the nation and the publics trust of the negotiators.
-- Revise and resubmit at JCR
How do new politicians distribute government resources in regimes with no electoral considerations? We argue that when the payoffs are not immediately clear in a low information environment, politicians use heuristics to make decisions that minimize political risks. We propose that for new local politicians, firm ownership types serve as a useful source of informational shortcuts to evaluating political importance, and this decision making process benefits state-owned firms. Using firm-level subsidies data in China combined with leadership turnover data at the provincial level from 2007 to 2015, we find that new provincial governors, immediately after taking office, distribute a significantly smaller proportion of subsidies to private firms relative to state-owned enterprises. The effect gradually attenuates as new governors understand local conditions and establish connections with local private firms. This strategy also proves to be politically effective, with governors who adopt such a strategy more likely to be promoted at the end of their tenure. [SSRN]
-- Under review
-- Under review
Closing the Institutional Gap: Protecting Technology in Foreign Direct Investment
It has commonly been viewed that foreign investors can seek outside institutional guarantees when investing in countries with relatively weak institutions for property protection, but for technological components of foreign direct investment, this option is in fact quite limited. How then do multinational corporations (MNCs) protect their property in host countries, especially in terms of technology assets? I argue that foreign direct investment can affect how domestic institutions for property protection develop, thereby contributing to better rule of law in its countries of destination. Rather than bypassing host country institutions, MNCs employ strategies to engage with both the host and home governments to achieve better property protection through host country institutions. The two channels also achieve differential effects, with home government engagement less effective at advancing enforcement of laws. I use instrumental variable analysis to show that FDI in research and development contribute to developing intellectual property institutions in host countries. A case study of General Electric's expansion in China illustrates the pivotal role MNCs can play in institutional building, and analysis of the USTR's annual watch list on intellectual property practices in foreign countries shows the limitations of the home country mechanism.
US Corporations and Extraterritorial Intellectual Property Regulation
When and how do governments choose to pursue extraterritorial policies? I argue that government preferences for extraterritorial regulation come from domestic corporations that compete in global markets. I outline an argument where business groups strategically engage in informational lobbying to shape government policies and governments are most responsive to the groups' information provision when they receive consistent signals, and when they come from strategically important actors. I test the theory by examining public comments submitted to the Special 301 annual review of intellectual property rights (IPR) protection in the United States. I find that consistency of information provision across business interests – repeated mentions of specific countries that violate IPR standards – is associated with increased likelihood of being targeted by the US Trade Representative (USTR). The degree to which business group preferences are incorporated into USTR policy, as measured by textual similarity between public submissions and the USTR final report, is conditional on the economic and strategic importance of business groups to US innovation. The evidence also shows that counter-lobbying by foreigner governments does not decrease the likelihood of being targeted by the USTR.