Security Externalities: A Firm-Centric Theoretical Framework for Economic Statecraft

International relations scholars continue to struggle to analyze the role of firms within contemporary economic statecraft. This article offers a vocabulary and firm-centric paradigm for thinking about how states exercise their economic tools of national power. It delineates the range of pathways via which “economics” (that is, the various types of firm activities) can affect a nation’s security. The result is a mutually exclusive and collectively exhaustive typology of security externalities. This framework offers a precise vocabulary for thinking about economic statecraft that advances the field’s understanding of geoeconomics and is more holistic than the traditionally sanctions-based approaches to economic statecraft commonly found in political science. Beginning with an examination of the theoretical elements of economic statecraft, it proceeds by presenting an innovative framework that articulates the specific causal logics connecting economic activities back to the national security of states before concluding with some initial considerations for applying this framework.