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International treaties and foreign direct investment: an empirical analysis of effects of bilateral investment treaties on South Korea's FDI

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  • Heon Joo Jung
  • Eun Mi Kim

Abstract

South Korea has been proactive in concluding bilateral investment treaties to promote both inward and outward investment. While South Korea had concluded 95 BITs as of 2017, there have been very few empirical works on whether BITs have positive effects on South Korea’s FDI flows. This paper aims to empirically examine the effects of BITs between South Korea and treaty partners on South Korea’s outward FDI into them. The results show that BITs—either signed or entered in force—between South Korea and host countries have positive and statistically significant effects on Korea’s direct investment into these countries. Moreover, it turns out that South Korea FDI flows into developing countries are positively affected by BITs which is statistically significant while those into developed countries are not. This paper positively contributes to existing literature by deepening understanding of the effects of international investment treaties.

Suggested Citation

  • Heon Joo Jung & Eun Mi Kim, 2020. "International treaties and foreign direct investment: an empirical analysis of effects of bilateral investment treaties on South Korea's FDI," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 25(3), pages 402-417, July.
    • Handle: RePEc:taf:rjapxx:v:25:y:2020:i:3:p:402-417
    DOI: 10.1080/13547860.2019.1686915
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    Cited by:

    1. Josef C. Brada & Zdenek Drabek & Ichiro Iwasaki, 2021. "Does Investor Protection Increase Foreign Direct Investment? A Meta‐Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 35(1), pages 34-70, February.
    2. Elena Kotyrlo & Hryhorii M. Kalachyhin, 2023. "The effects of India's bilateral investment treaties termination on foreign direct investment inflows," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1007-1033, October.

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