Beyond Jobs: When Citizens Reject Socially Irresponsible Foreign Direct Investment

Abstract

Recent scholarship shows that public attitudes toward foreign direct investment (FDI) are shaped by non-economic factors such as ethnocentrism, nationalism, and foreign threat perceptions. However, the influence of socially irresponsible behavior by investing firms on such attitudes remains underexplored. In this research note, we investigate individuals’ preferences regarding socially irresponsible FDI through a conjoint experiment conducted in Brazil, a key destination for international capital inflows in the Global South. We find that investing firms’ corrupt and environmentally damaging behavior significantly reduces public support for FDI, even when respondents are prompted to consider substantial job creation by the firm under challenging economic conditions. This effect persists among high-skilled labor, a group that typically stands to benefit the most from FDI. These findings contribute to our understanding of the determinants of public attitudes toward FDI by highlighting the salience of negative externalities over economic benefits. Ultimately, the study offers a cautionary tale for firms, policymakers, and civil society, underscoring public sensitivity to the social costs of globalization and the potential reputational risks of prioritizing expected economic benefits over responsible conduct.