Does the quality of bilateral investment treaties matter for outward foreign direct investment?
Shi Li,
Shujiro Urata and
Long Zhao
International Review of Economics & Finance, 2024, vol. 91, issue C, 207-218
Abstract:
Bilateral investment treaties (BITs) have been attracting the attention of policymakers with an interest in hosting foreign direct investment (FDI) to promote economic growth. Studies on the impacts of BITs on FDI inflows have produced mixed results. Unlike many studies, this research considers the quality of BITs. The analysis of FDI locational choices of Chinese multinational enterprises reveals significantly positive impacts of high-quality BITs. Furthermore, BITs exhibit a significantly amplified influence on the FDI of multinational corporations upon their implementation, in contrast to when they are initially signed. Additionally, private enterprises are more inclined towards engaging in FDI with nations possessing high-caliber BITs than state-owned enterprises. These findings suggest policymakers prioritize the quality of BITs and guarantee a seamless transition into effect after their signing, rather than solely focusing on their establishment.
Keywords: Bilateral investment treaties; Quality level; Foreign direct investment; Mixed logit model (search for similar items in EconPapers)
JEL-codes: C25 F13 F23 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:91:y:2024:i:c:p:207-218
DOI: 10.1016/j.iref.2024.01.026
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