State capital in a geoeconomic world: mapping state-led foreign investment in the global political economy

What are the consequences of the rise of foreign state-led investment for international politics? Existing research oscillates between a ‘geopolitical’ and a ‘commercial’ logic driving this type of investment and remains inconclusive about its wider international reverberations. In this paper, I suggest going beyond this dichotomy by analyzing its systemic consequences. To do so, I conceptually delineate a geoeconomic approach that emphasizes the globalized nature of foreign state investment. I argue that foreign state investment creates system-level patterns, which can be studied by observing similar sectoral and geographic investment behavior. I map this phenomenon globally for the first time, drawing on the largest dataset on foreign state investment. Empirically, I show how foreign state investment is highly concentrated in Europe, North America and East Asia, and is owned by a handful of dominant states. It is especially European geo-industrial clusters that represent the hotspots of such concentration. The findings also suggest that three global industries – energy production, high-tech manufacturing, and transportation and logistics – form the key areas for current and future state-led investment concentration. With these contributions, the paper illuminates the increasing presence of states as owners in the global political economy, and facilitates its study as a geoeconomic phenomenon.