Do Political Systems Affect Economic Outcomes? The Geography of Inward FDI and its Relationships with Growth and Inequality

Have you ever wondered if a ruthless dictator or a fiery democracy is actually better for business? This fascinating study of 144 countries uncovers a "U-shaped" reality where both highly stable autocracies and hyper-competitive democracies are masters at attracting foreign investment, while those stuck in the middle often struggle. Applying the Nobel-Prize-winning Acemoglu-Robinson framework to FDI reveals how the hunt for power, and the pressure of rising inequality is now shaping the global economy in ways you’d never expect.

Citation: Maimone Ansaldo Patti, D., Mudambi, R. & Navarra, P. (2026). Do political systems affect economic outcomes? The geography of inward FDI and its relationships with growth and inequality. Journal of International Business Studies. https://doi.org/10.1057/s41267-026-00849-8