DC Accepted Papers Paper:
Buying Influence: An Analysis of the Effect of Chinese FDI on a Country's UN General Assembly Voting
*Names in bold indicate Presenter
By using a panel dataset spanning from provided by the American Enterprise Institute on the FDI from China received by all countries in the period between 2005 and 2018, and variation within each country, I estimate the effect of FDI received on my outcome measure. I use GDP per capita, the impex rate, current account balance, total FDI inflow, Official Development Assistance received per capita, and population from the World Bank as controls. This builds upon previous literature by including additional years after the introduction of the BRI. I attempt to use inflation as an instrument to address endogeneity, but it is invalidated by a weak first stage. I find a small, statistically significant positive effect using OLS, but it is not economically significant. These results suggest less than a 1% increase in voting similarity given a 1 percentage point increase in the proportion of FDI to GDP, relative to similar countries that did not receive FDI, or that received less FDI. Although statistically significant, these results are not causal because FDI is endogenously determined during this period.