What the study found
The study found that cabinet policy orientation is associated with differences in gross capital inflows in OECD countries. In particular, transitions from state-oriented to market-oriented cabinets were linked to higher direct investment inflows.
Why the authors say this matters
The authors suggest that cabinet policy orientation helps explain how different reforms are connected to capital inflows. They conclude that the effects of product market reforms and labor market reforms depend on whether governments prefer a state-oriented or market-oriented economy.
What the researchers tested
The researchers constructed a new measure of cabinet policy orientation and examined OECD countries. They tested how transitions between state-oriented and market-oriented cabinets, along with product market reforms and labor market reforms, were associated with direct investment and portfolio investment inflows.
What worked and what didn't
Transitions from state-oriented to market-oriented cabinets were associated with higher direct investment inflows. Product market reforms were more conducive to direct investment inflows under cabinets that preferred a state-oriented economy, while labor market reforms significantly boosted direct investment and portfolio investment under governments favoring a market-oriented economy.
What to keep in mind
The abstract does not describe the size of the effects, the study design details, or any limitations. The summary only states associations observed in OECD countries.
Key points
- A new measure of cabinet policy orientation was constructed.
- Transitions from state-oriented to market-oriented cabinets were associated with higher direct investment inflows.
- Product market reforms were more conducive to direct investment under state-oriented cabinets.
- Labor market reforms significantly boosted direct investment and portfolio investment under market-oriented governments.
- The abstract describes associations in OECD countries, not causal proof.
Disclosure
- Research title:
- Cabinet policy orientation is linked to gross capital inflows in OECD countries
- Authors:
- Christos Mavrogiannis, Athanasios Tagkalakis
- Institutions:
- ATEbank (Greece), Hellenic Open University, University of Patras, University of Patras
- Publication date:
- 2026-03-10
- OpenAlex record:
- View
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