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WTO Working Papers

WTO working papers usually represent research in progress. Such research may be conducted in the preparation of WTO Secretariat reports, studies or other material for WTO members. The papers are circulated for comment because the WTO considers critical review of professional research to be extremely important.

English

More Stringent BITs, Less Ambiguous Effects on FDI? Not a Bit!

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.

English

Keywords: BITs, Dispute Settlement, FDI flows
JEL: F21: International Economics / International Factor Movements and International Business / International Investment; Long-Term Capital Movements; K33: Law and Economics / Other Substantive Areas of Law / International Law; F23: International Economics / International Factor Movements and International Business / Multinational Firms; International Business
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