IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/21324.html
   My bibliography  Save this paper

Bilateral Investment Treaties, Political Risk and Foreign Direct Investment

Author

Listed:
  • Kim, Sokchea

Abstract

The study constructs a linear model to evaluate the significant impacts of bilateral investment treaties (BITs) on foreign direct investment (FDI) and the possible consequences of BITs. The results show that BITs have significantly promoted FDI, and their effects are substitute for the level of political risk in a country. Another interesting finding is that BITs signed with non-OECD countries should not be overlooked. By estimating the growth of FDI resulting from an additional BIT ratified, the finding further indicates that BITs are more potential for most Asian countries to promote FDI. On average, a BIT ratified by a country in South, East, and South-East Asia can raise FDI by around 2.3 percent.

Suggested Citation

  • Kim, Sokchea, 2006. "Bilateral Investment Treaties, Political Risk and Foreign Direct Investment," MPRA Paper 21324, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:21324
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/21324/1/MPRA_paper_21324.pdf
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    as
    1. Rashmi Banga, 2003. "Impact of government policies and investment agreements on FDI inflows," Indian Council for Research on International Economic Relations, New Delhi Working Papers 116, Indian Council for Research on International Economic Relations, New Delhi, India.
    2. Dollar, David & Hallward-Driemeier, Mary & Mengistae, Taye, 2006. "Investment climate and international integration," World Development, Elsevier, vol. 34(9), pages 1498-1516, September.
    3. Nunnenkamp, Peter & Spatz, Julius, 2003. "Foreign direct investment and economic growth in developing countries: how relevant are host-country and industry characteristics?," Kiel Working Papers 1176, Kiel Institute for the World Economy (IfW).
    4. Hubert Janicki & Phanindra Wunnava, 2004. "Determinants of foreign direct investment: empirical evidence from EU accession candidates," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 505-509.
    5. 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.
    6. Bruce A. Blonigen & Ronald B. Davies, 2002. "Do Bilateral Tax Treaties Promote Foreign Direct Investment?," NBER Working Papers 8834, National Bureau of Economic Research, Inc.
    7. Mary Hallward-Driemeier, 2003. "Do bilateral investment treaties attract foreign direct investment? Only a bit - and they could bite," Policy Research Working Paper Series 3121, The World Bank.
    8. Sebastian Edwards, 1990. "Capital Flows, Foreign Direct Investment, and Debt-Equity Swaps in Developing Countries," NBER Working Papers 3497, National Bureau of Economic Research, Inc.
    9. Suleyman Tulug Ok, 2004. "What Drives Foreign Direct Investment into Emerging Markets? : Evidence from Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 40(4), pages 101-114, July.
    10. Singh, Harinder & Kwang W. Jun, 1995. "Some new evidence on determinants of foreign direct investment in developing countries," Policy Research Working Paper Series 1531, The World Bank.
    11. Andrzej Baniak & Jacek Cukrowski & And Jan HerczyƱski, 2003. "On the Determinants of Foreign Direct Investment in Transition Economies," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 48(2), pages 6-28, January.
    12. Jennifer Tobin & Susan Rose-Ackerman, 2003. "Foreign Direct Investment and the Business Environment in Developing Countries: the Impact of Bilateral Investment Treaties," William Davidson Institute Working Papers Series 587, William Davidson Institute at the University of Michigan.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 'Ofa, Siope Vakataki, 2009. "The WTO's telecommunications commitments and the credibility of telecommunications regulatory reforms in small island developing states," MPRA Paper 66184, University Library of Munich, Germany.

    More about this item

    Keywords

    Bilateral investment treaties; foreign direct investment; political risk;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:21324. 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: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.