Bilateral Investment Treaties and Foreign Direct Investment: A Political Analysis

Book Section

© 2009 by Oxford University Press, Inc. All rights reserved. This chapter examines the effect of bilateral investment treaties (BITs) on inward foreign direct investment flows (FDI) into least developed countries (LDCs). It suggests that BITs should not only boost FDI between the signatory states but more broadly increase inward FDI into the developing country signatory. The chapter begins with a discussion of the often narrow, legalistic conceptualization of BITs in previous studies, as well as previous dyadic and monadic empirical findings. It presents a statistical analysis of inward FDI flows into 122 developing countries with a population of more than 1 million from 1970 to 2000, and a qualitative analysis of the hypothesized causal mechanisms. It shows that the positive correlation between BITs and subsequent FDI is driven by the hypothesized causal mechanisms.

Full Text

Duke Authors

Cited Authors

  • Büthe, T; Milner, HV

Published Date

  • May 1, 2009

Book Title

  • The Effect of Treaties on Foreign Direct Investment: Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows

International Standard Book Number 13 (ISBN-13)

  • 9780199855322

Digital Object Identifier (DOI)

  • 10.1093/acprof:oso/9780195388534.003.0006

Citation Source

  • Scopus