Exploring Changes in How the EU Screens Foreign Investments

Foreign direct investment occurs when a resident in one economy invests in and establishes significant influence over an enterprise in another economy. In a changing geopolitical landscape, the EU and its member states have introduced novel mechanisms for screening foreign direct investment for national security risks. However, these mechanisms vary substantially in how they operate. In a recent study, Professor Sarah Bauerle Danzman at Indiana University and Professor Sophie Meunier at Princeton University explore the factors that explain this. They also highlight key policy implications in this shift towards a more assertive EU investment policy.