Varieties of state capital: What does foreign state-led investment do in a globalized world?

Existing studies have scrutinized the rise of states as global owners and investors, yet we still lack a good understanding of what state investment does in a globalized economy, especially in host states. Comparative capitalisms research has analyzed foreign state investment as a potential source of patient capital for coordinated and mixed-market economies. However, this patient capital framework cannot explain the recent surge of protectionist sentiments, even among the good hosts of state-led investment. Therefore, we go beyond the patient capital argument and develop a novel framework centered on the globalized nature of foreign state investment. We create and empirically illustrate a novel typology based on different modes of cross-border state investment-from financial to strategic-and different categories of host states. Our results provide a new pathway to study the rise and effects of cross-border state investment in the 21st century.

Automated summary

Previous studies have focused on the rise of states as global owners and investors, but a good understanding of the role of state investment in a globalized economy, particularly in host states, is still lacking. Comparative capitalisms research has analyzed foreign state investment as a potential source of patient capital for coordinated and mixed-market economies, but cannot explain the recent surge of protectionist sentiments. Therefore, a new framework centered on the globalized nature of foreign state investment is needed to study this phenomenon.