Ruler Succession in Authoritarian Countries and
Multinational Firms’ FDI Decisions
Prof. Tianyou HU
Assistant Professor in Management
FBA, UM
Date: 28/10/2025 (Tuesday)
Time: 13:00 to 14:00
Venue: FBA Lobby
Abstract
This study investigates how multinational firms navigate the uncertainty of ruler succession in authoritarian countries, a critical political transition that reshapes the non-business environment for foreign direct investment (FDI). We argue that succession deconstructs the credible commitments essential for FDI, compelling firms to halt investment while they assess the redistribution of political power and the potential for a new, stable governing order to emerge. Using data on Japanese FDI in the six monarchies of the Gulf Cooperation Council (GCC) from 1990 to 2019, our firm-level analysis shows that the likelihood of an FDI entry decreases following a ruler’s death, which is amplified when the deceased ruler had a strong international influence. Furthermore, this succession-driven uncertainty also increases the likelihood of FDI exit. However, this deterrent effect is mitigated when firms observe that the pre-announced successor possesses substantial military backing, signaling an ability to enforce a stable transition, or demonstrates a pro-market background, signaling a willingness to protect foreign investment.
Speaker
Tianyou is Assistant Professor in the Department of Management and Marketing, Faculty of Business Administration, University of Macau. He received his undergraduate degree from Peking University and his Ph.D. from National University of Singapore. Tianyou’s research spans the fields of Strategic Management and International Business, with special interests in interfirm alliances and networks, cooperation and competition, and institutions and FDI. Tianyou has published papers in Journal of International Business Studies, British Journal of Management, Journal of World Business, Management and Organization Review, and others.
All are welcome!
