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          Do Trade And Investment Agreements Lead To More Fdi? Accounting For Key Provisions Inside The Black Box (English)
          Working paper by Berger, Axel, Busse, Matthias, Nunnenkamp, Peter, Roy, Martin, 2009, 29 pages
          Categories: Investment, Regional and Bilateral Trade Agreements, Trade Policy Analysis and Trade Data Sources

          The previous literature provides a highly ambiguous picture on the impact of trade and investment agreements on FDI. Most empirical studies ignore the actual content of BITs and RTAs, treating them as "black boxes", despite the diversity of investment provisions constituting the essence of these agreements. We overcome this serious limitation by analyzing the impact of modalities on the admission of FDI and dispute settlement mechanisms in both RTAs and BITs on bilateral FDI flows between 1978 and 2004. We find that FDI reacts positively to RTAs only if they offer liberal admission rules. Dispute settlement provisions play a minor role. While RTAs without strong investment provisions may even discourage FDI, the reactions to BITs are less discriminate with foreign investors responding favourably to the mere existence of BITs.

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          More Stringent BITs, Less Ambiguous Effects on FDI? Not a Bit! (English)
          Working paper by Berger, Axel, Busse, Matthias, Nunnenkamp, Peter, Roy, Martin, 2010, 14 pages
          Categories: International Economic Law, Investment

          In this paper, we focus on investor-state dispute settlement provisions contained in various, though far from all, bilateral investment treaties as a possible determinant of BIT-related effects on bilateral FDI flows. Our estimation results prove to be sensitive to the specification of these provisions as well as the inclusion of transition countries in the sample. Stricter dispute settlement provisions do not necessarily result in higher FDI inflows so that the effectiveness of BITs as a credible commitment device remains elusive.