Perceived Political Ideology, Local Stakeholder Reactions, and Perceived FDI Risk: A Survey-Based SEM Study in India

This study examines associations among perceived political ideology, local stakeholder reactions, liability of foreignness, and perceived foreign direct investment (FDI) risk in India. Drawing on survey responses from 312 managers and executives, the study employs covariance-based structural equation modelling to assess theoretically specified direct and indirect relationships. The reported structural estimates indicate positive associations between perceived political hostility toward foreign investment and stakeholder resistance, liability of foreignness, and perceived FDI risk. Liability of foreignness is positively associated with perceived risk, whereas stakeholder resistance exhibits an unexpected negative association, contrary to the hypothesized direction. The findings highlight the relevance of managerial perceptions of political conditions and foreignness-related disadvantages to perceived investment risk. The cross-sectional, single-source design limits causal interpretation, while the negative stakeholder association requires further investigation.