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More stringent BITs, less ambiguous effects on FDI? Not a bit!

Author

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  • Berger, Axel
  • Busse, Matthias
  • Nunnenkamp, Peter
  • Roy, Martin

Abstract

We focus on investor-state dispute settlement provisions contained in various, though far from all, bilateral investment treaties as a possible determinant of BIT-related effects on bilateral FDI flows. Our estimation results prove to be sensitive to the specification of these provisions as well as the inclusion of transition countries in the sample. Stricter dispute settlement provisions do not necessarily result in higher FDI inflows so that the effectiveness of BITs as a credible commitment device remains elusive.

Suggested Citation

  • Berger, Axel & Busse, Matthias & Nunnenkamp, Peter & Roy, Martin, 2010. "More stringent BITs, less ambiguous effects on FDI? Not a bit!," WTO Staff Working Papers ERSD-2010-10, World Trade Organization (WTO), Economic Research and Statistics Division.
    • Handle: RePEc:zbw:wtowps:ersd201010
    DOI: 10.30875/ec4fa856-en
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    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.
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    More about this item

    Keywords

    Dispute Settlement; BITs; FDI flows;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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