Despite widespread economic liberalization, corruption in developing countries is pervasive and growing. We argue that foreign direct investment (FDI) liberalization draws multinational companies into corrupt and unfamiliar contexts, creating ripe targets for bureaucratic corruption. This corruption reflects motives of both bureaucrats and the politicians whom they serve, and politicians' capacity to shape bureaucrats' incentives. We exploit India's 2005 FDI liberalization, estimating its effects on multiple observable implications of bureaucratic corruption by district-level officers of the Indian Administrative Service. Our findings are consistent with state legislators abusing bureaucratic transfers to extract a share of bureaucratic corruption rents. In FDI-exposed districts, corruption-prone officers were more likely to be transferred and appointed the chief district bureaucrat, the single most lucrative post for  corruption. After liberalization, majority-foreign-owned firms were more likely to report demands for informal payments. Leveraging close state legislative elections in FDI-exposed districts, we find abnormal asset growth among only those winners with influence over transfers. We find no evidence that legislators used transfers to prevent corruption or maximize economic spillovers from FDI. Our findings help explain growing corruption in liberalized economies and suggest a novel motive for politicians to attract FDI. 

Do investment incentives influence private firms' location decisions? We distinguish between tax incentives and incentives that require real-time government spending including job training and infrastructure. The latter can influence where firms invest by resolving information asymmetries. We evaluate how these incentives shape the location decisions of foreign firms, investors who suffer from high information asymmetries. We leverage features of the Great Recession and 2009 Recovery Act stimulus, which temporarily increased state's fiscal capacity to fund real-time incentives. During the narrow stimulus spending window, states that received more federal Medicaid stimulus  - instrumented with the exogenous component of the federal Medicaid funding formula - attracted more foreign direct investment (FDI) and increased spending on real-time incentives. During the spending window, foreign-owned manufacturing plants located in US counties that lacked a history of FDI. On average, these counties saw more real-time state incentive spending. Counties with idle industrial capacity were more likely to be new FDI recipients only if they had narrow vote margins in the prior gubernatorial election. These findings suggest that governors offered real-time incentives in counties with lower start-up costs and more swing voters. Tax incentives had no effect on FDI. These findings have important policy implications for the efficient use of investment incentives. 

 A growing body of research argues that external threats from the international system strengthen ethnocentrism and authoritarianism, personal values anchored in national identity. We evaluate a necessary implication of this argument, that threat-driven value change manifests in broader social behaviors. Specifically, we analyze revealed value change in a non-political setting: American consumers' choice of supermarket brands that symbolize national identity. Our empirical analyses leverage US counties' quasi-random exposure to US Iraq War casualties to identify the effects of local casualties on the weekly market share growth of ``American" supermarket brands. Using weekly supermarket scanner data for a representative sample of over 1,100 US supermarkets and 8,000 brands, we find that the weekly market share of American brands grew in fallen soldiers' US hometowns. Variation in share growth across store demographics is consistent with the external threat mechanism. We rule out several alternative mechanisms including partisan cues, other product characteristics of American brands, and animosity towards other countries. These findings strengthen IR's theoretical microfoundations by showing that international politics reshapes values enough to change broader social behavior.

For marginalized social groups, global economic integration can offer new economic opportunities but may also trigger backlash by dominant groups. Foreign direct investment (FDI), we argue, fosters women's empowerment that is resilient to male backlash because it increases women's income and introduces gender equality norms. India's sudden 2005 FDI liberalization allows us to identify FDI's causal effect on women's empowerment and rape, a violent manifestation of male backlash. In FDI-exposed districts, rape declined, women's relative wage growth doubled, and women voiced stronger support for women’s empowerment. Women in these districts exercised household bargaining leverage and political participation in ways that increase safety. FDI from low gender equality countries, which raises income but lacks equality norms, increases rape. We rule out several alternative mechanisms. Our findings establish a new channel through which economic integration advances social equality.

Institutional threats to national identity, from within, i.e., internal threats, and from outside, i.e., external threats, affect sales of brands that are symbolic of a culture, either national or foreign. We suggest self-enchantment as a mediator and the focus on external threat as a mitigator of the adverse effects of internal threats. We test our propositions through six studies that include secondary data analyses and lab experiments. In Study 1, we analyze weekly supermarket scanner data, encompassing sales of over 8,000 brands across more than 1,100 US stores in 2004. We find that sales of American-sounding brands declined in counties that saw higher coverage of the Abu Ghraib torture scandal (internal threat) and sales of non-American-sounding brands decreased in counties with more war causalities (external threat). We use experiments in studies 2 through 4 to show that, (a) self-enchantment mediates the effect of threats on favorability toward the brand, (b) advertisements that refocus attention on how the brand helps to cope with external threats mitigate the negative effects of internal threats for American brands (c) but not for non-American brands. We adopt a multi-disciplinary methodology (qualitative, secondary data, and experimental) to triangulate the findings and ensure generalizability of the results.