The impact of economic sanctions on foreign direct investment: empirical evidence from global data

Purpose This study investigates the impact of global economic sanctions on foreign direct investment (FDI). Design/methodology/approach Data were gathered from several sources, including United Nations Conference Trade and Development, Global Sanction World Bank database, to build a dataset that consists 172 countries during period 2003–2019. The panel ordinary least square with fixed-effects estimator was exploited achieve research objective. Findings findings reveal sanction exerts detrimental effect total inflows FDI its components. Regarding different types sanctions, while military trade have little or even no greenfield investment, they more adverse sizable effects cross-border mergers acquisitions (M&As). authors further show exert devastating influences through infrastructure development channels. Practical implication Overall, this implies closer look at particular is required when implementing policies as may be affected differently by changes in economy, such sanctions. Originality/value paper first empirical critically inward flows two components: M&As. It then explores how sanction–FDI nexus varies depending country-level factors understand better are related international relations.