Bilateral Investment Treaties, Political Risk and Foreign Direct Investment

Sokchea Kim
Authors registered in the RePEc Author Service: Sokchea Lim

MPRA Paper from University Library of Munich, Germany

Abstract: The study constructs a linear model to evaluate the significant impacts of bilateral investment treaties (BITs) on foreign direct investment (FDI) and the possible consequences of BITs. The results show that BITs have significantly promoted FDI, and their effects are substitute for the level of political risk in a country. Another interesting finding is that BITs signed with non-OECD countries should not be overlooked. By estimating the growth of FDI resulting from an additional BIT ratified, the finding further indicates that BITs are more potential for most Asian countries to promote FDI. On average, a BIT ratified by a country in South, East, and South-East Asia can raise FDI by around 2.3 percent.

Keywords: Bilateral investment treaties; foreign direct investment; political risk (search for similar items in EconPapers)
JEL-codes: F21 K33 O11 (search for similar items in EconPapers)
Date: 2006-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Asia Pacific Journal of Economics & Business 1.11(2007): pp. 6-24

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:21324

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