The Regional Impact of Bilateral Investment Treaties on Foreign Direct Investment

Arjan Lejour; Maria Salfi

The Regional Impact of Bilateral Investment Treaties on Foreign Direct Investment

Arjan Lejour
, Maria Salfi

Research output: Working paper › Discussion paper › Other research output

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Abstract

We examine the impact of bilateral investment treaties (BITs) on bilateral FDI stocks using extensive data from 1985 until 2011. We correct for endogeneity using indicators for governance and membership of international organisations. We find that ratified BITs increase on average bilateral FDI stocks by 35% compared to those of country pairs without a treaty. Upper middle income countries seem to benefit the most from ratified treaties whereas high income countries with high governance levels do not profit at all. In addition, lower middle and low income countries experience significantly larger inward FDI stocks from partner’s countries. Distinguishing by region, we find that ratified BITs increase FDI stocks mainly in East Asia and Middle & Eastern Europe.

Original language	English
Place of Publication	The Hague
Publisher	CPB Netherlands Bureau for Economic Policy Analysis
Number of pages	40
ISBN (Print)	9058336735, 9789058336736
Publication status	Published - 2014
Externally published	Yes

Publication series

Name	CPB discussion paper
Volume	298

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 17 Partnerships for the Goals

Keywords

Auslandsinvestition
Internationales Investitionsrecht
Entwicklungsländer
Räumliche Wirkung

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abstract = "We examine the impact of bilateral investment treaties (BITs) on bilateral FDI stocks using extensive data from 1985 until 2011. We correct for endogeneity using indicators for governance and membership of international organisations. We find that ratified BITs increase on average bilateral FDI stocks by 35\% compared to those of country pairs without a treaty. Upper middle income countries seem to benefit the most from ratified treaties whereas high income countries with high governance levels do not profit at all. In addition, lower middle and low income countries experience significantly larger inward FDI stocks from partner{\textquoteright}s countries. Distinguishing by region, we find that ratified BITs increase FDI stocks mainly in East Asia and Middle \& Eastern Europe. ",

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T1 - The Regional Impact of Bilateral Investment Treaties on Foreign Direct Investment

AU - Lejour, Arjan

AU - Salfi, Maria

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AB - We examine the impact of bilateral investment treaties (BITs) on bilateral FDI stocks using extensive data from 1985 until 2011. We correct for endogeneity using indicators for governance and membership of international organisations. We find that ratified BITs increase on average bilateral FDI stocks by 35% compared to those of country pairs without a treaty. Upper middle income countries seem to benefit the most from ratified treaties whereas high income countries with high governance levels do not profit at all. In addition, lower middle and low income countries experience significantly larger inward FDI stocks from partner’s countries. Distinguishing by region, we find that ratified BITs increase FDI stocks mainly in East Asia and Middle & Eastern Europe.

KW - Auslandsinvestition

KW - Internationales Investitionsrecht

KW - Entwicklungsländer

KW - Räumliche Wirkung

M3 - Discussion paper

SN - 9058336735

SN - 9789058336736

T3 - CPB discussion paper

BT - The Regional Impact of Bilateral Investment Treaties on Foreign Direct Investment

PB - CPB Netherlands Bureau for Economic Policy Analysis

CY - The Hague

ER -

The Regional Impact of Bilateral Investment Treaties on Foreign Direct Investment

Abstract

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UN SDGs

Keywords

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