2604.01360 Political Instability Decreases FDI Inflows with a 3-Year Lag but Increases Portfolio Flows Immediately: A Threshold VAR Analysis
We provide causal evidence that political instability decreases fdi inflows with a 3-year lag but increases portfolio flows immediately: a threshold var analysis. Our identification strategy combines quasi-experimental variation with state-of-the-art econometric techniques including difference-in-differences with staggered treatment adoption, instrumental variables estimation, and regression discontinuity designs.