Yumi Park
My research centers on three broad substantive interests in international political economy (IPE). The centerpiece of my research program is understanding the ways in which politics of trade and finance overlap and interact to produce global patterns of economic development. I'm also interested in how international economic cooperation and domestic politics shape and constrain one another. Finally, some of my works in progress reflect my interest in the earlier history of global capital markets, critical historical junctures of financial institutional change and their intersection with comparative political economy and/or international conflict. Beyond my substantive interests in international relations, I am invested in adopting network science to applicable topics in IPE.
Revise & Resubmit
Varieties of Globalization: Trade Openness, Bank Lobbying, and the Political Economy of Financial Liberalization
Why do some countries develop more globalized financial markets than others? One conventional wisdom of the international political economy literature is that finance follows trade. There are substantial variations, however, among countries that are similarly integrated into the global economy that have chosen different levels of financial liberalization. I examine this puzzle with a new framework that looks at how a country’s trade openness affects its domestic banks’ lobby for financial market liberalization. I find that governments are more likely to face pressures for financial liberalization from domestic banks when the country is heavily integrated into international trade but has not yet removed capital controls. On the other hand, domestic banks are more likely to pressure the government for financial liberalization when the private benefits of international capital inflows outweigh the benefits of private rents provided by the government domestically. Using my own dataset on global trade networks and government subsidies to the financial sector in 181 countries from 1980 to 2018, I find that countries that are integrated into the global economy with a domestic banking industry that does not depend on government subsidies will develop larger, deeper and more globalized financial markets. This study contributes to the scholarship of international political economy by distinguishing financial liberalization from economic liberalization and explaining the many cases of financial liberalization that are not crisis-induced.
Under Review & Working Papers
International Cooperation during Economic Shocks: The Political Consequences of US Currency Swap Arrangements (with Sujeong Shim) Under Review
Can international cooperation affect public opinion and possibly reverse the anti-incumbent sentiments during economic shocks? We examine this question by analyzing the effect of the US Federal Reserve’s Currency Swap Arrangements (CSAs). The Federal Reserve (the Fed) has emerged as a global lender of last resort by providing currency swap arrangements (CSAs) to foreign central banks. While existing literature explores the economic consequences, there is a limited understanding of their political ramifications. We argue that Fed swap lines are associated with increased domestic public support for the recipient governments because swaps lead to overall economic stabilization in the country. Although swaps can positively impact many aspects of an economy, we propose that CSAs' role in stabilizing exchange rates and creating room for expansionary monetary policies could be crucial. Using quarterly data focused on the 2008 global financial crisis, we find supportive evidence for our claims. Our findings demonstrate that the Fed, much like other international organizations, can influence foreign countries' domestic politics.
Divided We Fall, United We Prosper? Partisan Politics in the Negotiation of Bilateral Investment Treaties (with Andrew McWard) Under Review
How does domestic partisanship affect international cooperation? We evaluate the success of international cooperation outcomes in terms of formation and durability by investigating the international investment regime. Democracies––when acting as host states for FDI––form BITs to generate a credible commitment against future regulation of foreign investment. But the success of this commitment is conditioned by the partisanship of the leading executive. Left-wing executives form BITs to tie their own party’s hands and signal a refrain from future regulation. Right-wing executives, in contrast, form BITs to tie the hands of future, non-right parties. To tie the hands of another party, a right-wing executive requires full control over the legislative branch of government. Left-wing executives, meanwhile, require bipartisan support to overcome opposition within their own party. Using data on BIT formation and termination from the International Investment Agreements (IIAs) dataset, we find that different partisan alignments in the ruling government generate different domestic winset sizes that influence the likelihood of BIT formation and the length of an agreement's duration. The argument and findings add to our understanding of the domestic politics of international cooperation and how variation within democracies can affect international relations.
Navigating the Nexus: Multinational Corporations, Regulatory Capture, and Foreign Direct Investment (with Anne Jamison) Under Review
Does the degree of regulatory capture in a host country shape foreign direct investment decisions? Existing literature demonstrates that firms with better government connections are more successful in navigating regulatory environments. This is particularly important in sectors that are heavily regulated, such as telecommunications, energy, and natural resources. However, we know little of how these dynamics factor into the strategies of multinational corporations looking to enter foreign markets. We theorize that if domestic firms have already achieved regulatory capture, MNCs will merge with or acquire these domestic firms rather than undertake greenfield investment. To test this hypothesis, we leverage terabytes of media data to map networks of relationships between incumbent firms and the government in host countries. Combining this network analysis with data on hundreds of thousands of cross-border deals, we demonstrate that the mode of entry into a country is explained by the pre-existing level of conflict or cooperation between firms and the government. Specifically, multinationals are three times as likely to enter vis-à-vis a local partner in contexts with enmeshed business-government relations. Our research contributes to an understanding of how domestic politics shape the patterns of foreign direct investment, and, by extension, globalization. It also advances our understanding of business-government relations outside of advanced democracies, which is particularly important given that there is often less of a separation between economics and politics in authoritarian contexts.
Finance Follows Trade? A Networks Perspective
Do trade networks predict financial networks? Using the Temporal Exponential Random Graph Model (TERGM), this study investigates whether trade networks can predict financial networks. The analysis reveals that while trade networks are significant predictors of the de facto financial network, they do not predict the de jure financial network. These findings suggest three things: (1) In general, governments tend to liberalize their markets to trade before liberalizing their markets to finance. (2) More trade flows are associated with more capital flows, but more trade liberalization policies do not necessarily correlate with more financial liberalization policies. (3) International agreements that liberalize finance do not fully transfer over to domestic regulations. My findings help understand the ways in which the politics of trade and finance overlap and interact to produce global patterns of economic development.
It Takes Two to Swap: The Political Economy of the China’s Bilateral Swap Agreements and the Global Financial Safety Net (with Aditi Sahasrabuddhe)
Under what conditions does bilateral cooperation in the Global South emerge? The proliferation of bilateral swap agreements in the Global South is puzzling for two key reasons: First, borrower countries are not well positioned to manage the risks associated with swap agreements. Second, swaps provided by emerging markets do not enable countries to provide a credible signal of stability to financial markets. Using original data collected on the global BSA network, we evaluate the conditions under which Global South swap lines complement or crowd out alternative sources of financing from the IMF and Regional Financial Arrangements. We find that non-China swap lines from Global South providers (such as from India) complement swaps from China. For countries that do not have an active loan from the IMF, China's swaps and IMF loans tend to crowd each other out, conditional on IMF capacity. Regional arrangements and China's swaps have a similar crowding out effect on one another. Our study adds to expanding knowledge about financial relations in the Global South: the fragmentation of the Global Financial Safety Net leaves emerging and developing economy borrowers even more vulnerable to powerful creditors and the lack of cohesion among them.
Cosmopolitan Leaders and Treaty Ties: How Pre-Office Foreign Experience Shapes International Cooperation (with Xunchao Zhang)
Does pre-office foreign experience at the leadership level influence patterns of international cooperation? We examine whether leaders who have experience living in foreign soil before taking office, which we refer to as ``cosmopolitan leaders," are more inclined to sign economic treaties. Contrary to the expectation that such leaders would be more cooperative across international agreements, our research reveals that cosmopolitan leaders are less inclined to sign economic treaties in general and tend to be more selective, influenced by factors like colonial legacy and country affinity. Leveraging an original dataset on cosmopolitan leaders, we empirically test our theory at both monadic and dyadic levels, examining global leaders from 1901 to 2001. Our study contributes to the existing literature by systematically exploring the impact of pre-office leadership experience on trade agreement patterns. We disentangle leadership traits from institutional constraints and enhance socialization theories by focusing on pre-office experiences.
Work in Progress
Corruption perceptions home and abroad: Universal values or double standards (with Zoltan Fazekas, Mogens Kamp and Michael Mueller)
How does the public perceive and punish corrupt multinational companies? Do company features matter for the electoral punishment faced by the politicians involved? To answer our research questions, we field a set of original multi-country survey experiments. We argue that perceptual biases shape how severe corruption acts are deemed and why only some corrupt companies and politicians are punished.
Commitment and Competition in Britain’s Sovereign Debt Management, 1694-1750: A Principal-Agent Perspective
(with Doohwan Ahn)
How did the Anglo-French rivalry affect the development of long-term debt in eighteenth century Britain? We argue that Britain’s vibrant party politics surrounding the Anglo-French rivalry – first between the Tory and Whig parties and then between the Court and Country parties – shaped the political conditions for privatization of sovereign debt in early 18th century Britain. The “jealousy of credit” (Shovlin, 2016) between Britain and France encouraged innovation and improvement in the management of the national debt. Using the historical change-point analysis, we show that two years – 1710 and 1717 – marked the significant restructuring of the debt market when the British parliament institutionalized bidding wars between multiple financial agents such as the Bank of England, the East India Company, and the South Sea Company, to keep sovereign debt cheap. We measure structural change in the debt market by changes in the proportion of long-term to short-term debt.
When do Financial Institutions Change? A Case Study of the Federal Reserve
This project investigates the political conditions that made the establishment of the Federal Reserve possible, especially when earlier attempts to establish a central bank in the U.S. had failed. I extend the argument of my dissertation to theorize that the U.S.’s changing position in international trade and the level of government subsidy to the banking sector in each state affected the varying legislative vote outcomes for the First National Bank Act, the Second National Bank Act, and the Federal Reserve Bank Act.