Foreign state investment and international politics: mapping state-led geoeconomic competition in the global political economy
What are the consequences of the rise of foreign state-led investment for international politics? Existingresearch oscillates between a “geopolitical” and a “commercial” logic driving this type of investmentand is thus inconclusive about its wider international reverberations. In this paper, I suggest goingbeyond this dichotomy by analyzing its systemic consequences. Conceptually, I argue that foreign stateinvestment creates system-level patterns, which have consequences for international relations: similarsectoral and geographic investment behavior carries the potential for intensified geoeconomiccompetition and conflict. I map this phenomenon on a global scale for the first time, using the largestdataset on foreign state investment. Empirically, I show how foreign state investment is highlyconcentrated in Europe, North America and East Asia, and among a few powerful states as owners. Itis especially European geo-industrial clusters that represent opportunities for such competitivedynamics. The findings also suggest that three global industries – energy production, high-techmanufacturing, and transportation and logistics – form the key areas for current and future state-ledcompetition. With these conceptual and empirical contributions, the paper illuminates the increasingpresence of states as owners in the global political economy, and its consequences for internationalpolitics