IR Semineri: “Reputations, Foreign Direct Investment, and Contract Breach”, Ekrem T. Başer, 10:30 20 Mayıs 2024 (EN)

Ekrem T. Başer
Syracuse University

Title: “Reputations, Foreign Direct Investment, and Contract Breach”

Date: Monday, May 20th, 10.30
Place: A-130 Seminar Room

Abstract: Reputational concerns can constrain states from violating foreign investors’ property rights. However, who values its reputation more—a state with an already stellar or damaged reputation? Via a formal model, I argue that better reputations increase the temptation to exploit the trust they generate. Empirically, the problem is that the theory expects correlation and causation to pull in opposite directions because non-reputational mechanisms also constrain states’ temptations. These states have good reputations but cannot exploit them. Naive comparisons should find better reputations to correlate negatively with expropriation, contrasting my argument. As a solution, I consider how natural disasters affect reputation dynamics and argue that states with better reputations are more likely to breach due to disasters. I test this implication by leveraging the exogenous occurrence of disasters and find that reputations significantly moderate the effect of disasters on breach, consistent with expectations. Reputational enforcement is inefficient, losing effectiveness with improved reputations.

Bio: Ekrem Baser is a Postdoctoral Researcher at Syracuse University, Maxwell School. His research intersects international relations and political economy, focusing on commitment problems and their solutions, reputation and signaling dynamics, and institutional formation. He works on these themes in substantive contexts covering both IPE and international conflict. Methodologically, Ekrem works with formal models, tools of design-based inference on both observational and experimental data, and computational methods. His research is published or forthcoming at the International Studies Quarterly, Public Management Review, and Turkish Studies.