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Cultural Determinants Of Foreign Direct Investment: Nationalist-Xenophobic Attitudes

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  • Sebastian Tocar

    (Alexandru Ioan Cuza University of IaÅŸi, Romania)

Abstract

Cultural characteristics related to the values of national identity (patriotism, nationalism) and attitudes toward other peoples (xenophobia) represent important elements of cultural specificity that influence various dimensions of socioeconomic life, including economic processes. Unfortunately, these specific characteristics are not often investigated, especially in this context, probably because of the difficulty of quantifying them and the general sensitivity of the topic. This study presents an original approach to the study of nationalist-xenophobic attitudes and their relationship to foreign direct investment (FDI). The aim of this study is to identify theoretical benchmarks for approaching the topic of nationalism-xenophobia, to develop a synthetic indicator to quantify nationalism-xenophobic attitudes, and to highlight the mechanism of their influence on FDI attraction. The methodology used for conducting this research comprises the methods of analysis, synthesis, induction (for logical connections and theoretical argumentation), weighted average technique (for the elaboration of Nationalism-xenophobia Index), Cronbach’s Alpha coefficient of internal consistency (to test the reliability of the construct) and Pearson correlation coefficient (for the correlation analysis). The author's contributions include a study of the relationship between nationalist and xenophobic sentiments, the development of the Nationalism-xenophobia Index, an indicator of the intensity of these sentiments in society, an analysis of the relationship between nationalism-xenophobia relations and the amount of FDI attracted per capita, the identification and explanation of the cultural mechanism by which nationalist and xenophobic sentiments influence various phenomena, including FDI. Logical-theoretical assumptions and arguments are confirmed by the results of quantitative data analysis. The findings of the study confirm that the cultural characteristics associated with nationalism and xenophobia represent important elements of cultural specificity that influence economic processes, including FDI. Numerous studies show that the nationalist dimension of ethnocentrism is closely related to xenophobia. Analysis of countries' scores on the nationalism-xenophobia index depending on the dominant Christian denomination and the presence of a communist past shows a link between nationalist-xenophobic, Orthodox (and, to a lesser extent, Catholic) values and the values of communist ideology, which negatively affect FDI attraction. Furthermore, nationalist-xenophobic attitudes have a negative impact on FDI attraction, both directly and indirectly, showing a strong negative impact.

Suggested Citation

  • Sebastian Tocar, 2022. "Cultural Determinants Of Foreign Direct Investment: Nationalist-Xenophobic Attitudes," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 8(2).
    • Handle: RePEc:bal:journl:2256-0742:2022:8:2:19
    DOI: 10.30525/2256-0742/2022-8-2-146-152
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    References listed on IDEAS

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    1. Elina Pradkhan, 2016. "Impact of culture and patriotism on home bias in bond portfolios," Review of Managerial Science, Springer, vol. 10(2), pages 265-301, March.
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    3. Davidov, Eldad, 2009. "Measurement Equivalence of Nationalism and Constructive Patriotism in the ISSP: 34 Countries in a Comparative Perspective," Political Analysis, Cambridge University Press, vol. 17(1), pages 64-82, January.
    4. Shayo, Moses, 2009. "A Model of Social Identity with an Application to Political Economy: Nation, Class, and Redistribution," American Political Science Review, Cambridge University Press, vol. 103(2), pages 147-174, May.
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    More about this item

    Keywords

    nationalism; xenophobia; foreign direct investment; intercultural; cultural values; Nationalismxenophobia Index;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion
    • Z19 - Other Special Topics - - Cultural Economics - - - Other

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