Alliance, Technology, and Globalization in Foreign Direct Investment : To What Extent Can Globalization Expand?

Economic relations among allied countries have long been examined in international relations, but research usually focuses on trade. In this paper, I apply and extend this argument to inward foreign direct investment (IFDI). Three cases of Chinese capital intended for investment in the United States (US) were examined to investigate whether the security relations with the partner country affect state decision-making regarding accepting IFDI. I demonstrated that the policy of accepting IFDI varied by whether the investing company’s home country was an ally of the US. Implications of these findings are discussed, for example, globalization of capital will expand between allies and be limited with non-allies.