External commitment mechanisms, institutions, and FDI in GCC countries
AbstractThe purpose of this paper is to empirically examine the influence of bilateral investment treaties and domestic institutions on foreign direct investment (FDI) in the GCC countries. Using panel data for the period 1984-2002 and instrumental variables estimation methodology, the paper finds that bilateral investment treaties (BITs) contracted with OECD and upper middle-income countries have a surprisingly negative influence and seem to be prevailed by the significantly positive influence of domestic institutions on FDI. BITs contracted with high-income non-OECD countries have a positive influence and prevail domestic institutions. The results have important institutional reform implications for GCC economic diversification efforts.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Financial Markets, Institutions and Money.
Volume (Year): 19 (2009)
Issue (Month): 2 (April)
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Web page: http://www.elsevier.com/locate/intfin
Foreign direct investment External commitment mechanisms Bilateral investment treaties Institutions GCC;
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