There is extraordinary variation in how governments treat multi- national corporations in emerging economies; in fact, governments around the world have nationalized or eaten away at the value of foreign-owned property in violation of international treaties. This even occurs in poor countries, where governments are expected to, at a minimum, respect the contracts they make with foreign firms, lest foreign capital flee. In The Shield of Nationality, Rachel L. Wellhausen introduces foreign-firm nationality as a key determinant of firms’ responses to government breach of contract. Firms of the same nationality are likely to see a compatriot’s broken contract as a forewarning of their own problems, leading them to fight or to take flight. In contrast, firms of other nationalities are likely to meet the broken contract with apparent indifference. Evidence includes quantitative analysis and case studies that draw on field research in Ukraine, Moldova, and Romania.

Rachel L. Wellhausen is an assistant professor of government and holds courtesy appointments at the McCombs School of Business and the Center for Russian, Eastern European, and Eurasian Studies at the University of Texas at Austin. She is co-editor of Production in the Innovation Economy (2014), an interdiscipli- nary volume emerging from the multi-year MIT project on the links between innovation and manufacturing in the United States and abroad. Wellhausen has published in the Journal of Conflict Resolution, Business and Politics, and Systems and Synthetic Biology. She has also worked in the political risk industry.