Applying FDI screening in Italy: Evidence from a new dataset

The International political economy debate is increasingly focused on securitization. The technological rivalry between the US and China, which emerged bluntly during the Trump Presidency, is still shaping national economic and defense agendas worldwide on several trade issues. De-risking and de-coupling have become frames of reference, also in the public debate, to understand and evaluate governmental policies setting controls on critical infrastructures and supply chains. Several scholars looked at Foreign Direct Investments (FDI) as a relevant area for understanding the securitization of international trade. An increasing number of governments have introduced screening mechanisms to regulate the influx of foreign capital in areas considered strategic for national interests. So far, the literature has shed light on the introduction of these regulatory frameworks (Meunier 2017; Di Giulio and Moro 2020; Calcara and Poletti 2023) and the cross-country variation in scope (Meunier 2014). Notably, a dataset coding whether and to what extent countries regulated FDI over time has been created (Bauerle-Danzman and Meunier 2023). Moreover, Canes-Wrone and colleagues (2020) assessed the impact of FDI on US domestic politics. More specifically, the authors looked at the conditions under which an FDI triggers a legislative backlash. Apart from this attempt, little is still known about how these mechanisms are applied in concrete decisions, especially concerning Europe. This is mainly because national authorities do not usually disclose disaggregated data concerning the FDIs under scrutiny and the outcome of the decisional processes. In this sense, Italy represents an exception, as the Parliament periodically scrutinizes government application of the FDI screening mechanism, and information about decisions is disclosed. On this basis, we created a dataset with observations collected at the level of a single decisional process made by Italian governments from 2014 to 2022. Italy indeed provides an interesting case for this kind of analysis. In 2012, the Parliament conceded the government the power to veto FDI. In 2017, Italy promoted a common European screening mechanism with France and Germany, suddenly changing its policy stance two years later (Calcara and Poletti 2023). This paper presents the dataset and illustrates the preliminary findings emerging from the analysis. Through a series of descriptive statistics and logit models, we examine the determinants of the governmental decisions on single cases of foreign investments in Italy, assessing if the cabinet decides to veto the FDI and which aspects the decision touches, whether the firm's governance or its assets. We do so by focusing on several factors drawn from existing literature. Specifically, we aimed attention at the features of firms on which capitals are directed, the peculiar aspects of the FDI and Italian national and local governments. As such, this paper contributes to the emerging debates over FDI and securitization of international trade: for the first time, it sheds light on the decisional process that drives cabinets to block FDI and provides a brand-new dataset valuable for future research.