CAREER: Understanding Geoecoconomic Factors for Achieving Geopolitical and Economic Objectives

This award funds research projects that combine theory and data to understand the geoeconomic mechanisms of international political coercion and great power competition and how these determine international trade movements, as well as international capital and currency markets. Geoeconomics, a largely unexplored area, studies the economies of countries and the relationship among countries on a global scale. Great powers use geoeconomic strengths and related policies to achieve their geopolitical and economic objectives. This research consists of five projects. It studies the consequences of a great power that can project economic influence, provides empirical measurement of geoeconomic powers, and examines how countries can shield themselves from unwanted influence. It also analyzes competition between great powers of the world and the role of a country?s currency in power projection. Finally, it investigates competition and cooperation in corporate tax regimes. The results are globally relevant given the focus on strategic sectors, trade policy, and national security concerns over ownership of strategic assets. The research findings could help develop optimal geoeconomic strategies, enhance the wellbeing of citizens, and structure international interactions among countries. The research also produces teaching materials designed to equip future students and researchers with the tools they need to further advance the field.

This award funds research projects that study how countries leverage their international economic relationships to pursue geopolitical and economic objectives. This theoretical and empirical research consists of five parts. This research first provides a theoretical framework, a basic model of geoeconomics, to understand how countries can leverage their international economic relationships to influence the policies and economic activities in foreign countries. Second, it focuses on the trade-off between economic security and integration and studies how countries can most effectively safeguard themselves against unwanted foreign influence, balancing the need to safeguard economic security against the benefits of international economic integration. This project provides a model-based measure of power and, drawing on public data on trade and financial service flows, estimates the sources of power for Great Powers. Third, in an increasingly multipolar world with geopolitical rivals, it examines great power competition and assesses how international economic activities and political relationships are shaped by great power competition. It develops a theoretical model of competing influence by multiple hegemons within a global production network and constructs a new dataset of government ownership to trace how governments are expanding strategic investments. Fourth, it investigates geopolitics of currency competition and studies how a country having a dominant currency shapes a geoeconomic strategy, with particular emphasis on the effect of the rise of alternative currencies. This research employs a dynamic model of reputation building in which countries compete to supply safe assets, and in which there are economic and geopolitical benefits to becoming a reserve currency. Fifth, it focuses on international national tax competition, cooperation, and geopolitics and evaluates how countries compete and cooperate over corporate tax regimes, with an emphasis on the potential for international cooperation as well as for hegemonic countries to use coercion to enforce their preferred tax regime. This study uses micro-data on activities of U.S. multinationals to estimate elasticities of firm activities to changes in corporate tax regimes. These statistics are used to inform a quantitative model of tax competition across countries that is used to evaluate the welfare and distributional consequences of corporate tax reform. These projects could enable researchers and decision-makers to gain deeper insights into the underlying drivers of international relations and the influence of geoeconomic factors.