A trio of papers to be presented at the American Political Science Association’s 2026 annual meeting argues that multinational companies are not passive responders to market conditions or institutional quality, but active participants in domestic political processes. The session brings together evidence suggesting that public sentiment, partisan realignment and targeted state measures determine when foreign direct investment (FDI) is contested, withdrawn or retained.
Firm behaviour meets public politics
The panel, chaired by Calvin Thrall of Columbia University with discussants Rachel Wellhausen (University of Texas at Austin) and Hao Zhang (New York University), reframes how scholars and policymakers should think about the governance of international investment. It challenges the standard view that FDI flows respond chiefly to aggregate institutional quality or market fundamentals.
According to the session description, the papers advance what the panel calls firm-centred political theories of globalisation. Together they argue that domestic political forces — from public opinion and party politics to sectoral bargaining and state incentives — are central to understanding the behaviour of multinational firms under rising geopolitical tension, democratic backsliding and renewed protectionism.
Core findings presented
The panel comprises three papers that, in combination, map different causal pathways linking firms and national politics. The contribution of each paper is summarised as follows:
- Public attitudes condition opposition to FDI. A survey experiment in India shows views on foreign investment depend strongly on the investor’s country of origin and perceived geopolitical rivalries, and are resistant to elite framing.
- States deploy compensatory measures to retain firms amid institutional decline. Theorising firm retention under democratic backsliding, the second paper argues that regimes use targeted resource transfers — subsidies, tax incentives and regulatory favours — to offset rising political risk, and supports the claim with cross‑national evidence.
- Home‑country politics shape firm conduct. The third contribution shifts focus to how businesses in the United States reallocated political spending in response to changing conditions at home and abroad, indicating firms adjust domestic political engagement strategically.
| Paper focus | Key mechanism |
|---|---|
| Public opposition to FDI (India) | Investor country of origin; geopolitical rivalry |
| Firm retention under democratic backsliding | Targeted state transfers to offset political risk |
| Home‑country political realignment (US firms) | Reallocation of campaign contributions and domestic political engagement |
Implications for policy and politics
The panel’s argument alters the analytical frame policymakers use when considering foreign investment. If domestic opinion and partisan calculations are decisive, then investment policy is not merely a technocratic choice about market openness; it is an arena of contestation shaped by identity, geopolitics and electoral calculus.
Equally, the finding that regimes facing democratic erosion may seek to retain international capital through selective incentives underscores a political trade‑off. Governments can blunt the economic consequences of political risk by offering concessions to firms. But such arrangements may entrench uneven treatment and weaken broader institutional safeguards if they become routinised.
Finally, the suggestion that firms adjust political spending and behaviour in response to shifting risks highlights the two‑way character of the relationship. Multinational companies are not only objects of state strategy; they are actors that reconfigure domestic political landscapes through their engagement.
For national governments — including the UK — the session signals that decisions about investment screening, subsidy regimes and political transparency should be considered alongside electoral politics and public attitudes. How states balance security concerns, market access and institutional norms will shape not only capital flows but the domestic political consequences of globalisation.
The papers will be presented in person at the APSA meeting on Sunday 6 September, offering scholars and practitioners an empirical account of how international investment is increasingly governed through domestic political factors.
