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The Costs of Domestic Political Unrest

Braithwaite, A; Kucik, J; Maves, J; (2014) The Costs of Domestic Political Unrest. International Studies Quarterly , 58 (3) pp. 489-500. 10.1111/isqu.12061. Green open access

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Does domestic political unrest deter foreign direct investment (FDI)? And what are the longer term impacts of unrest upon the market? Most theories suggest that investors are deterred by unrest. However, empirical research returns only marginal support. We argue that these mixed results stem from the conflation of the distinct tactics and outcomes of political unrest. Violent forms of unrest increase uncertainty and risk. By comparison, nonviolent forms of unrest are shown to more frequently achieve their goals and increase the prospects for democratic change and market stability. In addition, investors avoid markets where campaigns have ended in failure, defined as the campaign not achieving their stated political aims. Failed campaigns often precipitate a cycle of unrest that create greater uncertainty over the long-term stability of a state. We find strong evidence in favor of our propositions, even after taking political motivation and non-random selection into account. © 2013 International Studies Association.

Type: Article
Title: The Costs of Domestic Political Unrest
Open access status: An open access version is available from UCL Discovery
DOI: 10.1111/isqu.12061
Publisher version: http://dx.doi.org/10.1111/isqu.12061
Additional information: © 2013 The Authors. International Studies Quarterly published by John Wiley & Sons Ltd on behalf of International Studies Association This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
URI: https://discovery.ucl.ac.uk/id/eprint/1399932
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