Susanna Thede
Title: Affiliated Researcher School/office: Örebro University School of Business
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About Susanna Thede
Dr Susanna Thede is a senior lecturer at University of Malta. Her research interests are international economics, institutional economics and political economy. She is currently working on several collaborative projects, including the following:
The Effects of Corruption Experience on FDI: Evidence from Swedish Manufacturing Enterprises (joint with Associate Professor Patrik Karpaty, Örebro University School of Business)
Abstract: In this paper, we analyze if the enterprise decision to invest in a corrupt market is affected by its prior experience of corrupt markets. Our conjecture is that multinational enterprises (MNEs) learn how to navigate corrupt environments so that corruption experience reduces the fixed cost of market entry into other corrupt markets. We test this conjecture using a rich data set on manufacturing enterprises originating in an uncorrupt country, Sweden, over the 1997-2015 period. The market entry effect of corruption experience is identified using an extended gravity model (Morales et al., 2019) that controls for other forms of market similarity defined by income, language, border and sub-regional characteristics. In addition, we extend the analysis to quantify the corruption learning effect using a Sigmoid learning function that increases with corrupt market duration. We find strong support of our conjecture using fixed effects logit, conditional logit and mixed logit estimations, which show that prior corrupt market experience and continued presence in these environments reduces the market entry cost to another corrupt market. To understand the effect of corruption on foreign direct investment, historical investment paths of MNEs need to be taken into account. (Under revision)
Tariff Overhang and Aid: Theory and Empirics (joint with Professor Oliver Lorz, RWTH Aachen University)
Abstract: In this paper, we consider aid payments as a possible explanation for tari ff overhangs. We set up a theoretical model in which rich countries use development aid
to pay for tariff concessions. Developing countries, in turn, may anticipate such
a policy in the negotiations for tari ff bindings. Setting the bound tari ff rate at a
relatively high level can serve as a mechanism to incentivize rich countries to carry
on with aid payments in the subsequent "aid for trade" game. We empirically examine
this hypothesis using detailed data on WTO members' bound and applied
tari rates under the Uruguay agreement. The data sample contains almost all
aid recipients participating in the Uruguay round negotiations. Our results provide
strong support for the model's prediction that larger tariff overhangs are implemented
by countries that receive more aid. (FREIT Working paper 1743. Submitted).