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Naïve no more: Foreign direct investment screening in the European Union

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  • Sarah Bauerle Danzman
  • Sophie Meunier

Abstract

This paper asks what explains the creation and comparative features of national Investment Screening Mechanisms (ISMs) in Europe. After providing a brief history and definition of ISMs, we provide descriptive patterns about the similarities and differences in the investment screening features of national ISMs in EU member states. We then explain differences in national screening policies by focusing on the role of public debt, Chinese investment, R&D expenditures and various geographic groupings. Finally, we make three policy arguments about the rise of ISMs in Europe: (1) ISMs have not been designed as protectionist instruments, (2) the politics of inward investment screening reflects a shift from economic to security logic in addressing the fundamental tension between the benefits and vulnerabilities of open markets and (3) the EU can use the ‘commercialisation’ of security to extend its own competence in the security sphere. We conclude by considering how the rapid expansion of investment screening in Europe could affect economic openness, as well as the role of the EU as a global actor.

Suggested Citation

  • Sarah Bauerle Danzman & Sophie Meunier, 2023. "Naïve no more: Foreign direct investment screening in the European Union," Global Policy, London School of Economics and Political Science, vol. 14(S3), pages 40-53, July.
    • Handle: RePEc:bla:glopol:v:14:y:2023:i:s3:p:40-53
    DOI: 10.1111/1758-5899.13215
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    References listed on IDEAS

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    1. Sophie Meunier & Kalypso Nicolaidis, 2019. "The Geopoliticization of European Trade and Investment Policy," Journal of Common Market Studies, Wiley Blackwell, vol. 57(S1), pages 103-113, September.
    2. Anastasia Ufimtseva, 2020. "The Rise of Foreign Direct Investment Regulation in Investment‐recipient Countries," Global Policy, London School of Economics and Political Science, vol. 11(2), pages 222-232, April.
    3. Chilton, Adam S. & Milner, Helen V. & Tingley, Dustin, 2020. "Reciprocity and Public Opposition to Foreign Direct Investment," British Journal of Political Science, Cambridge University Press, vol. 50(1), pages 129-153, January.
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    6. Keyan Lai, 2021. "National security and FDI policy ambiguity: A commentary," Journal of International Business Policy, Palgrave Macmillan, vol. 4(4), pages 496-505, December.
    7. Zenobia T. Chan & Sophie Meunier, 2022. "Behind the screen: Understanding national support for a foreign investment screening mechanism in the European Union," The Review of International Organizations, Springer, vol. 17(3), pages 513-541, July.
    8. Sophie Meunier, 2017. "Integration by Stealth: How the European Union Gained Competence over Foreign Direct Investment," Journal of Common Market Studies, Wiley Blackwell, vol. 55(3), pages 593-610, May.
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    Cited by:

    1. Guri Rosén & Sophie Meunier, 2023. "Economic Security and the Politics of Trade and Investment Policy in Europe," Politics and Governance, Cogitatio Press, vol. 11(4), pages 122-128.

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