Advanced Search
MyIDEAS: Login to save this paper or follow this series

Are Stricter Investment Rules Contagious? Host Country Competition for Foreign Direct Investment through International Agreements

Contents:

Author Info

  • Eric Neumayer
  • Peter Nunnenkamp
  • Martin Roy

Abstract

We argue that the trend toward international investment agreements (IIAs) with stricter investment rules is driven by competitive diffusion, namely defensive moves of developing countries concerned about foreign direct investment (FDI) diversion in favor of competing host countries. Accounting for spatial dependence in the formation of bilateral investment treaties (BITs) and preferential trade agreements (PTAs) that contain investment provisions, we find that the increase in agreements with stricter provisions on investor-state dispute settlement and pre-establishment national treatment is a contagious process. Specifically, a developing country is more likely to sign an agreement with weak investment provisions if other developing countries that compete for FDI from the same developed country have previously signed agreements with similarly weak provisions. Conversely, contagion in agreements with strong provisions exclusively derives from agreements with strong provisions that other FDI-competing developing countries have previously signed with a specific developed source country of FDI

Download Info

If 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.
File URL: https://www.ifw-members.ifw-kiel.de/publications/are-stricter-investment-rules-contagious-host-country-competition-for-foreign-direct-investment-through-international-agreements/KWP_1910.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1910.

as in new window
Length: 46 pages
Date of creation: Mar 2014
Date of revision:
Handle: RePEc:kie:kieliw:1910

Contact details of provider:
Postal: Kiellinie 66, D-24105 Kiel
Phone: +49 431 8814-1
Fax: +49 431 85853
Email:
Web page: http://www.ifw-kiel.de
More information through EDIRC

Related research

Keywords: bilateral investment treaties; preferential trade agreements; investment provisions; competition for FDI; spatial dependence;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Richard Baldwin & Dany Jaimovich, 2010. "Are Free Trade Agreements Contagious?," NBER Working Papers 16084, National Bureau of Economic Research, Inc.
  2. Jeffrey H. Bergstrand & Peter Egger, 2011. "What Determines BITs?," CESifo Working Paper Series 3514, CESifo Group Munich.
  3. Baldwin, Richard, 1993. "A Domino Theory of Regionalism," CEPR Discussion Papers 857, C.E.P.R. Discussion Papers.
  4. Berger, Axel & Busse, Matthias & Nunnenkamp, Peter & Roy, Martin, 2011. "More stringent BITs, less ambiguous effects on FDI? Not a bit!," Economics Letters, Elsevier, vol. 112(3), pages 270-272, September.
  5. Neumayer, Eric & Pl├╝mper, Thomas, 2010. "Spatial Effects in Dyadic Data," International Organization, Cambridge University Press, vol. 64(01), pages 145-166, January.
  6. Edward D. Mansfield & Helen V. Milner & Jon C. Pevehouse, 2008. "Democracy, Veto Players and the Depth of Regional Integration," The World Economy, Wiley Blackwell, vol. 31(1), pages 67-96, 01.
  7. Baldwin, Richard, 1997. "The Causes of Regionalism," CEPR Discussion Papers 1599, C.E.P.R. Discussion Papers.
  8. Elkins, Zachary & Guzman, Andrew T. & Simmons, Beth A., 2006. "Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1960 2000," International Organization, Cambridge University Press, vol. 60(04), pages 811-846, October.
  9. Srividya Jandhyala & Witold J. Henisz & Edward D. Mansfield, 2011. "Three Waves of BITs: The Global Diffusion of Foreign Investment Policy," Journal of Conflict Resolution, Peace Science Society (International), vol. 55(6), pages 1047-1073, December.
  10. David L. Carr & James R. Markusen & Keith E. Maskus, 2001. "Estimating the Knowledge-Capital Model of the Multinational Enterprise," American Economic Review, American Economic Association, vol. 91(3), pages 693-708, June.
  11. Fabian Barthel & Matthias Busse & Eric Neumayer, 2010. "The impact of double taxation treaties on foreign direct investment: evidence from large dyadic panel data," LSE Research Online Documents on Economics 28823, London School of Economics and Political Science, LSE Library.
  12. 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.
  13. Lauge N. Skovgaard Poulsen & Emma Aisbett, 2011. "When the Claim Hits: Bilateral Investment Treaties and Bounded Rational Learning," Crawford School Research Papers 1105, Crawford School of Public Policy, The Australian National University.
  14. Egger, Peter & Larch, Mario, 2008. "Interdependent preferential trade agreement memberships: An empirical analysis," Journal of International Economics, Elsevier, vol. 76(2), pages 384-399, December.
  15. Barbara Koremenos, 2007. "If Only Half of International Agreements Have Dispute Resolution Provisions, Which Half Needs Explaining?," The Journal of Legal Studies, University of Chicago Press, vol. 36(1), pages 189-212, 01.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:1910. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dieter Stribny).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.