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Bilateral investment treaties and foreign direct investment: Evidence from emerging market firms

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  • Li, Shi
  • Zhao, Long

Abstract

Bilateral investment treaties (BITs) help developing countries attract foreign direct investment (FDI) from developed countries. However, whether BITs matter for emerging market firms’ (EMFs) FDI is unclear. This paper investigates how BITs affect EMFs’ FDI locations using conditional logit models with firm-level panel data from 2003 to 2015. The results show that BITs can help host countries attract FDI from emerging market countries. BITs work alongside good institutions to increase the attractiveness of FDI, irrespective of a host country being developed or not.

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  • Li, Shi & Zhao, Long, 2021. "Bilateral investment treaties and foreign direct investment: Evidence from emerging market firms," Research in International Business and Finance, Elsevier, vol. 58(C).
    • Handle: RePEc:eee:riibaf:v:58:y:2021:i:c:s027553192100101x
    DOI: 10.1016/j.ribaf.2021.101480
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    More about this item

    Keywords

    Foreign direct investment; Emerging market firms; Bilateral investment treaties;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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