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BIT Contracting and FDI Impact in the GCC Countries

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  • Wasseem Mina

    (Department of Economics and Finance, College of Business and Economics, U.A.E. University.)

Abstract

The rationale for GCC countries increasingly contracting of BITs is controversial. This paper empirically examines the short term and long term impact BITs contracting on FDI and distinguishes it by the income level of the contracting partner country. The paper uses panel data for the period 1984-2002 and adopts a GMM estimation methodology. The paper finds that while ratified BITs with high income non-OECD countries have a positive impact on FDI, ratified BITs with upper middle income countries have a surprisingly negative impact. These results are robust to changes in model specification and sample period.

Suggested Citation

  • Wasseem Mina, 2008. "BIT Contracting and FDI Impact in the GCC Countries," Working Papers 437, Economic Research Forum, revised 09 Jan 2008.
    • Handle: RePEc:erg:wpaper:437
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    References listed on IDEAS

    as
    1. Neumayer, Eric & Spess, Laura, 2005. "Do bilateral investment treaties increase foreign direct investment to developing countries?," World Development, Elsevier, vol. 33(10), pages 1567-1585, October.
    2. Mina, Wasseem, 2007. "The location determinants of FDI in the GCC countries," Journal of Multinational Financial Management, Elsevier, vol. 17(4), pages 336-348, October.
    3. Jennifer Tobin & Susan Rose-Ackerman, 2011. "When BITs have some bite: The political-economic environment for bilateral investment treaties," The Review of International Organizations, Springer, vol. 6(1), pages 1-32, March.
    4. Wasseem, Mina, 2007. "Are the GCC FDI Location Determinants Favorable?," Economics Discussion Papers 2007-23, Kiel Institute for the World Economy (IfW Kiel).
    5. Ginsburg, Tom, 2005. "International Substitutes for Domestic Institutions: Bilateral Investment Treaties and Governance," International Review of Law and Economics, Elsevier, vol. 25(1), pages 107-123, March.
    6. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

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