Work

The impact of heterogeneity in bilateral investment treaties on foreign direct investment

Year: 2025

Type: article

Abstract: Prior research remains highly debated regarding whether bilateral investment treaties (BITs) effectively attract foreign direct investment (FDI). In this context, this study introduces a new dataset, the international investment agreement (IIA) mapping project, and panel data on FDI flows among 203 countries worldwide from 2009 to 2021. The findings indicate that higher BITs quality indicators, including breadth, depth, and non-economic standards (NES), significantly enhance FDI stock, with this effect remaining robust across various model specifications. Furthermore, as the domestic institutional quality of host countries improves, this positive effect is further amplified. These insights deepen the understanding of BITs effectiveness and offer policy implications for policymakers aiming to attract FDI through more comprehensive BITs.

Source: Journal of Applied Economics

DOI: 10.1080/15140326.2025.2485243

Authors: Zhaokuan Zhu, Chang-Bong Kim, Jaeeun Hwang

Institutions: Kyung Hee University, Chung-Ang University

Language: English

Topic: International Arbitration and Investment Law

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $1,533