In Song Kim - Why Trade and FDI Should Be Studied Together
Global value chains have knit trade and foreign direct investment (FDI) together as firms’ engagement in one activity inextricably depends on the other. Yet, existing political economy research often fails to consider the two simultaneously. We offer an integrated theory that explains how FDI changes countries’ trade profiles and creates new political cleavages in trade policy. To test our theory, we first examine the effect of firms’ new greenfield FDI projects since 2003 and find their presence is associated with over 45 more products exported from host countries in the subsequent year. To overcome the empirical challenges of evaluating our theory at the firm-product level, we then manually link our data with Vietnamese customs data. We find that Vietnamese export (import) volumes of FDI-related products increased by 100% (30%) within four years of initial investments. Furthermore, these products also enjoyed deeper tariff cuts in the 2015 Vietnam-Korea Free Trade Agreement.
In Song Kim is Associate Professor of Political Science at the Massachusetts Institute of Technology. He completed his Ph.D. in Politics at Princeton University. His research interests include International Political Economy and Formal and Quantitative Methodology. His research focuses on the political economy of lobbying and campaign donation, estimation of political preferences, and causal inference with panel data. His dissertation won the 2015 Mancur Olson Award for the Best Dissertation in political economy. An article version of this research received the 2018 Michael Wallerstein Award for the best published article in political economy. In Song Kim conducts Big Data analysis of international trade. He is developing methods for dimension reduction and visualization to investigate how the structure of international trade around the globe has evolved over time. His work has appeared and is forthcoming in various academic journals, including the American Political Science Review, American Journal of Political Science, Annual Review of Political Science, International Organization, International Studies Quarterly, Political Analysis, and The Journal of Politics.