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

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. 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. Terms of use: Documents in EconStor may

Are stricter investment rules contagious? Host country competition for foreign direct investment through international agreements

“…This is due to the fact that the 8 Yackee's classification has previously been employed in Berger et al (2011;2013 code of 3) and IIAs (i.e. BITs or PTAs) with weak versus strong ISDS or NT provisions (strong requires either ISDS or NT code of 3, weak is achieved by either ISDS or NT code of 1 or 2).…”

Do Trade and Investment Agreements Lead to More FDI? Accounting for Key Provisions Inside the Black Box

“…Furthermore, the extension by MFN obligations found in RTAs and BITs hardly affects our major results and does not offer additional insights. The effect of NT provisions is slightly weaker in the full sample when comparing the results in columns (4) and (6), while 21 See also Berger et al (2010) for ambiguous effects of ISDS provisions in BITs. 22 As is well known, the inclusion of MFN clauses in trade agreements helped foster freer trade in Europe from the mid-19 century to World War I.…”

Regulatory chill and the effect of investor state dispute settlements

“…A number of papers has analyzed the role of bilateral investment treaties, and ISDS provisions in particular, for inward FDI. In a series of papers, Busse, Königer, and Nunnenkamp (), Berger, Busse, Nunnenkamp, and Roy (), and Neumayer, Nunnenkamp, and Roy () find little or no evidence for stricter ISDS provisions to promote FDI, using aggregate FDI data in a gravity‐type regression framework. By contrast, Egger and Merlo ()—using micro data from the universe of German multinational firms—find a positive and significant effect of BITs on the number flows and FDI magnitude in host countries.…”