Geopolitics and opposition to foreign direct investment in the EU: evidence from a conjoint experiment

Abstract Do geopolitical considerations affect European citizens’ attitudes toward incoming Foreign Direct Investment (FDI)? This article draws on existing literature to derive hypotheses about the geopolitical drivers of citizens’ opposition to FDI. We test these hypotheses with a conjoint experiment embedded in a survey fielded in the EU’s three largest economies: France, Germany, and Italy (N ≈ 4,500). Our micro-foundational evidence shows that three factors consistently shape opposition to inward FDI across all three countries: (1) concerns about relative gains—citizens are more likely to oppose investments that benefit the sending country more than their own; (2) military alliance status—citizens are less likely to oppose FDI from security allies; and (3) EU membership—citizens are significantly less opposed to investments from other EU Member States. Contrary to prior expectations, we find no evidence of a consistent “China effect.” Overall, the findings suggest that the EU’s recent shift toward a more geopolitical approach to investment screening broadly aligns with the preferences of its public.