Do Additional Bilateral Investment Treaties Boost Foreign Direct Investments?
AbstractThis paper finds that the stock of bilateral investment treaties (BIT) is subject to diminishing returns measured in terms of foreign direct investment flows. Diminishing returns are more pronounced among country-pairs that have not signed bilateral investment treaties but have their own BIT network than among country-pairs with their own bilateral investment treaties. For a given country's BIT network, a multinational enterprise finds more value in investing where a bilateral treaty is in place. This may suggest either stronger property-rights protection or greater latitude to use the host country as an export platform. Our subsidiary finding is that an index of a country's BIT network diversity appears to be a plausible explanation of the limiting force underlying the diminishing returns of the stock of BITs in a world where there is a mix between horizontally and vertically integrated multinational enterprises.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences in its series Mo.Fi.R. Working Papers with number 43.
Date of creation: Oct 2010
Date of revision:
Contact details of provider:
Postal: Piazzale Martelli, 8 6012 Ancona
Phone: +39 071 220 7083
Fax: +39 071 220 7102
Web page: http://sites.google.com/site/mofirunivpm/
More information through EDIRC
bilateral investment treaty; foreign direct investment; gravity equation; network diversity;
Other versions of this item:
- Chang Hoon Oh & Michele Fratianni, 2010. "Do Additional Bilateral Investment Treaties Boost Foreign Direct Investments?," Working Papers 2010-04, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-13 (All new papers)
- NEP-IFN-2010-11-13 (International Finance)
- NEP-INT-2010-11-13 (International Trade)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hoekman, Bernard & Saggi, Kamal, 1999. "Multilateral disciplines for investment-related policies," Policy Research Working Paper Series 2138, The World Bank.
- Michele FRATIANNI, 2007.
"The Gravity Equation in International Trade,"
307, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Peter Egger & Valeria Merlo, 2007. "The Impact of Bilateral Investment Treaties on FDI Dynamics," The World Economy, Wiley Blackwell, vol. 30(10), pages 1536-1549, October.
- Michele Fratianni & John Pattison, 2001. "International Organisations in a World of Regional Trade Agreements: Lessons from Club Theory," The World Economy, Wiley Blackwell, vol. 24(3), pages 333-358, 03.
- Michele Fratianni & Chang Hoon Oh, 2009.
"Expanding RTAs, trade flows, and the multinational enterprise,"
Journal of International Business Studies,
Palgrave Macmillan, vol. 40(7), pages 1206-1227, September.
- Michele Fratianni & Chang Hoon Oh, 2008. "Expanding RTAs, Trade Flows, and the Multinational Enterprise," Working Papers 2008-02, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Egger, Peter & Pfaffermayr, Michael, 2004. "The impact of bilateral investment treaties on foreign direct investment," Journal of Comparative Economics, Elsevier, vol. 32(4), pages 788-804, December.
- Rodolphe Desbordes & Vincent Vicard, 2007.
"Foreign Direct Investment and Bilateral Investment Treaties an International Political Perspective,"
Documents de travail du Centre d'Economie de la Sorbonne
bla07045, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Desbordes, Rodolphe & Vicard, Vincent, 2009. "Foreign direct investment and bilateral investment treaties: An international political perspective," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 372-386, September.
- Rodolphe Desbordes & Vincent Vicard, 2007. "Foreign direct investment and bilateral investment treaties, an international political perspective," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00176051, HAL.
- Burger, M.J. & van Oort, F.G. & Linders, G.J.M., 2009.
"On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-Inflated Estimation,"
ERIM Report Series Research in Management
ERS-2009-003-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Martijn Burger & Frank van Oort & Gert-Jan Linders, 2009. "On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-inflated Estimation," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(2), pages 167-190.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maurizio Mariotti).
If references are entirely missing, you can add them using this form.