Article

Globalization and International Conflict: Can Foreign Direct Investment Increase Cooperation Among Nations?

Solomon W. Polachek, Carlos Seiglie and Jun Xiang

in The Oxford Handbook of the Economics of Peace and Conflict

Published in print April 2012 | ISBN: 9780195392777
Published online November 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780195392777.013.0029

Series: Oxford Handbooks

 Globalization and International Conflict: Can Foreign Direct Investment Increase Cooperation Among Nations?

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There is a long-standing literature that has examined how international trade itself might induce cooperation and peace among states potentially in conflict. In particular, despite some disagreements between leaders of different states, these leaders could be induced to maintain peace if war implies a disruption of trade, and such trade is essential to the performance of each state's economy. Mutual economic interdependence, then, could induce peaceful relations. This article takes this line of reasoning one step further, to consider both theoretically and empirically the positive influence of international capital flows on peace between nations.

Keywords: international trade; trade disruption; peace maintenance; state economy; international capital flows

Article.  11888 words. 

Subjects: Economics ; Econometric and Statistical Methods and Methodology: General ; Health, Education, and Welfare

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