Department of Sociology Colloquium Series: Kimberly Hoang: Risky Investments: How Local and Foreign Investors Finesse Corruption-Rife Emerging Markets

Date: 

Tuesday, April 24, 2018, 3:00pm to 5:00pm

Location: 

William James Hall, 33 Kirkland Street, Room 1550

Department of Sociology Colloquium Series presentation by Kimberly Hoang.

 

Abstract:

How do investors enter and navigate markets where there is a general lack of access to information and where the law is open to interpretation? Drawing on interview data with a total of 100 research subjects (77 local, regional, and global investors, 20 brokers, and three state officials), in Vietnam’s real estate market, this article makes contributions to the literatures of economic sociology and development. First looking at a diverse set of local, regional, and global investors, this article theorizes how market actors pursue different strategies to manage risky investments that involve a great deal of risk and  uncertainty in different ways depending on their proximity to state officials. This paper argues that investors’ proximity depends on four co-constitutive processes: legal/regulatory, social ties, cultural matching, and stage of investment. In other words, investors’ closeness to different state officials depends most heavily on the local and global laws of governance and regulation to which market actors must adhere; their ability to develop social networks and forge ties with political elites; their cultural familiarity in these local spaces (i.e., the extent to which they can speak the same language and share in similar trust-building/bonding rituals); and the stage of their investment that they enter the market. Furthermore, by looking at a diverse group of investors with varying degrees of proximity to the state, the paper argues that the current conceptualization of obfuscation does not enable us to theorize how or why market actors might choose to cement intimate interpersonal relationships with political elites or when they would strategize to keep their distance by establishing institutional barriers between themselves and political elites to avoid reputational risk or possible criminal charges. Importantly, in some instances, investors give gifts not only to obfuscate a tie; rather, gift-giving cultivates an intimate and personal relationship that demonstrates care and commitment to the association for the long term. Second, by engaging with the sociology of development literature, this study also highlights how multiple-state market relations can coexist within the same state. Heterogeneous state-market relations—conceived from the perspective of market actors (bottom up), rather than from state actors (top down)—refers to market actors’ social and physical proximity to key state officials. By paying attention to variation in market actors’ relationships with the state at the local, regional, and central levels of government, the paper argues that multiple state-market relations can coexist within one state, as the state works to protect the interests of local investors while simultaneously encouraging Foreign Direct Investment.