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The International Trade effects of Bilateral Investment Treaties

Author

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  • Benedikt Heid

    (School of Economics, University of Adelaide)

  • Isaac Vozzo

    (School of Economics, University of Adelaide)

Abstract

We study the international trade effects of bilateral investment treaties (BITs) and compare them to those of regional trade agreements (RTAs). We find that a typical BIT increases bilateral trade flows by similar amounts as an RTA if the RTA contains an investment chapter. BITs have larger trade effects than RTAs without an investment chapter. Results are robust to controlling for the effects of unilateral investment laws. They imply that evaluations of trade and investment agreements should also consider investment regulation.

Suggested Citation

  • Benedikt Heid & Isaac Vozzo, 2020. "The International Trade effects of Bilateral Investment Treaties," School of Economics and Public Policy Working Papers 2020-08, University of Adelaide, School of Economics and Public Policy.
    • Handle: RePEc:adl:wpaper:2020-08
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    File URL: https://media.adelaide.edu.au/economics/papers/doc/wp2020-08.pdf
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    References listed on IDEAS

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    Cited by:

    1. Heid, Benedikt & Vozzo, Isaac, 2020. "The international trade effects of bilateral investment treaties," Economics Letters, Elsevier, vol. 196(C).
    2. Soheila Khajoui & Saeid Dehyadegari & Sayyed Abdolmajid Jalaee, 2024. "Predicting the impact of e-commerce indices on international trade in Iran and other selected members of the Organization for Economic Co-operation and Development (OECD) by using the artificial intel," Papers 2403.20310, arXiv.org.
    3. Peter Egger & Alain Pirotte & Catharine Titi, 2023. "International investment agreements and foreign direct investment: A survey," The World Economy, Wiley Blackwell, vol. 46(6), pages 1524-1565, June.
    4. Soheila Khajoui & Saeid Dehyadegari & Sayyed Abdolmajid Jalaee, 2024. "Forecasting Imports in OECD Member Countries and Iran by Using Neural Network Algorithms of LSTM," Papers 2402.01648, arXiv.org.
    5. Jacopo Timini & Nicola Cortinovis & Fernando López Vicente, 2022. "The heterogeneous effects of trade agreements with labour provisions," The World Economy, Wiley Blackwell, vol. 45(9), pages 2820-2853, September.
    6. Blanga-Gubbay, Michael & Rubínová, Stela, 2023. "Foreign direct investment, trade and economic development: An overview," WTO Staff Working Papers ERSD-2023-11, World Trade Organization (WTO), Economic Research and Statistics Division.
    7. Xiong, Tingting, 2022. "The Effect of Bilateral Investment Treaties (BITs) on the extensive and intensive margins of exports," The Quarterly Review of Economics and Finance, Elsevier, vol. 84(C), pages 68-79.
    8. Liu, Haiyue & Wang, Cangyu & Zhang, Qin & Wang, Yile, 2024. "The impact of Chinese overseas industrial parks on the productive capability of BRI host countries," China Economic Review, Elsevier, vol. 85(C).

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    More about this item

    Keywords

    Bilateral investment treaties; regional trade agreements; international trade; structural gravity.;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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