Home bias and political ideology: experimental evidence on attitudes toward FDI in Southeast Europe

This study explores home bias in foreign direct investment (FDI) preferences through an experiment involving 12,419 participants across six Southeast European countries. Respondents evaluated hypothetical companies, varying by origin (domestic vs. foreign) and employment outcomes (gains vs. losses). Results indicate strong home bias, amplified by nationalist and socialist ideologies. However, home bias diminishes in loss scenarios resembling brownfield FDI, reflecting negative privatisation experiences with corrupt domestic actors. These findings reveal the ideological drivers of economic policy preferences and a nuanced public stance on FDI, shaped by historical context and pragmatism in Southeast Europe’s post-socialist landscape.