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Do Bilateral Investment Treaties Promote Foreign Direct Investment?
TNC ONLINE   2012-09-18 19:27:13 Author:Julien Chaisse and Christian Bellak Source: Font size:[Large][Middle][Small]
Transnational Corporations Review
ISSN 1918-6444 (Print), ISSN 1925-2099 (Online)
Edited by Ottawa United Learning Academy
Published by Denfar Transnational Development
Volume 3, Number 4, December 2011, 3-10

Authors: Julien Chaisse and Christian Bellak

Abstract: The future of the international investment regime is rapidly evolving and many different kinds of investment treaties are now being negotiated. In particular, the EU, which is emerging as a new actor on the scene of international Foreign Direct Investment (FDI) policy, will need to know what kind of FDI-related provisions it should favor (reviewer’s remark – made use of British English spelling). We argue that much can be learned from the substance of existing Bilateral Investment Treaties (BITs) as differences in legal provisions of BITs are crucial regarding the application of BITs in praxi. Therefore, this paper presents a new methodology to measure the effect of the essential legal provisions of BITs. Starting with a review of 40 empirical studies, the (heterogeneous) empirical results of the effects of BITs on FDI are summarized. In the conceptual part of this paper, the most important legal substantive criteria as well as the key technical features of BITs are identified together with their variants. These are the components of a new BITSEL index.

Keywords: Bbilateral treaties, Foreign Direct Investment, law, policy, econometrics


Aisbett, Emma Kate (2009). “Bilateral Investment Treaties and Foreign Direct Investment: Correlation versus Causation” in: Karl P. Sauvant; Lisa E. Sachs, “The Effect of Treaties on Foreign Direct Investment” (Oxford: Oxford University Press) 395–435.
Büthe, Tim; Milner, Helen v. (2008) “The Politics of Foreign Direct Investment into Developing Countries: Increasing FDI through International Trade Agreements?” American Journal of Political Science, Vol. 52, No. 4, October 2008, 741–762.
Busse, Matthias; Königer, Jens; Nunnenkamp, Peter (2010) “FDI promotion through bilateral investment treaties: More than a bit?” Review of World Economics, Vol. 146, Issue 1, 147–177. 

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