Institutional Policy of Foreign Investment in the Framework of Multilateral and Regional Investment Treaties
Subject Areas :
Journal of Investment Knowledge
Mostafa Heidari Haratemeh
1
(
Department of Economics, Naragh Branch, Islamic Azad University, Naragh, Iran
)
Vahid Araei
2
(
Department of Public Administration and Public Policy, Central Tehran Branch, Islamic Azad University, Tehran, Iran
)
seyed mahmod eslami
3
(
Department of Public Administration and Public Policy, Central Tehran Branch, Islamic Azad University, Tehran, Iran
)
Received: 2023-05-01
Accepted : 2023-08-01
Published : 2024-12-21
Keywords:
"Gravity Model",
" Institutional Policy ",
"Foreign investment",
" Investment Treaty",
Abstract :
The present study, using the data of 22 countries in the period from 2011 to 2021, examined the approach of multilateral and regional investment treaties and its effect on foreign investment through an Gravity model. It also assesses the interaction between bilateral investment treaties and host country institutions and how this relationship differs between developed-developing partners and developing-developing partners. The results showed: a) The effect of control variables of large market and common language in all models is positive and significant, but the effect of distance variable is negative and significant. The population variables of the host country and the neighborhood, except for the pair of developing countries, are not significant determinants for the flow of foreign direct investment. Bilateral investment treaties are positive and significant in all models, but between developing countries, they have a greater impact on foreign direct investment. b) By adding the variables of institutional quality, the colonial relationship and the dummy variable free trade agreement, to the model, by Conclusion a bilateral investment treaty, the host country provides foreign investors with a foreign institutional framework that reliably commits to protect their investment better than domestic institutions can. In this case, they are substitutes and a negative relationship is expected.
References:
حیدری هراتمه، مصطفی. (1401). تاثیر قراردادهای سرمایه‌گذاری بر سیاست‌زدایی اختلافات سرمایه‌گذاری خارجی (رویکرد قانونی شدن، دیپلماسی و توسعه). مدیریت تبلیغات و فروش، 3(3)،90-101.
حیدری هراتمه، مصطفی. (1400). تاثیر نسبی سخت گیری قراردادهای سرمایه‌گذاری بر رابطه بین بی‌ثباتی سیاسی و انتخاب مالکیت وابسته. پیشرفت‌های مالی و سرمایه‌گذاری، 2(5)، 112-91.
Achen, Christopher (2000). “Why Lagged Dependent Variables Can Suppress the Explanatory Power of Other Dependent Variables.” Unpublished manuscript. Available at: http://polmeth.wustl.edu/papers/00/achen00.zip.
Aisbett, Emma (2009). Bilateral Investment Treaties and Foreign Direct Investment: Correlation versus Causation. In Karl P. Sauvant and Lisa E. Sachs, editors, The Effects of Treaties on Foreign Direct Investment. Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows. Oxford, UK: Oxford University Press.
Aykut, Dilek and Andrea Goldstein, (2006). "Developing Country Multinationals: South-South Investment Comes of Age," OECD Development Centre Working Papers 257, OECD Publishing.
Aykut, Dilek and Dilip Ratha, (2004). “South-South FDI flows: how big are they?” Transnational Corporations. Volume 13, Number 1, April 2004.
Beck, Nathaniel, & Jonathan N. Katz (1995) ‘‘What to Do (and Not to Do) with Time-Series Cross-Section Data,’’ 89 American Political Science Review. 634–47. - (1996) ‘‘Nuisance vs. Substance: Specifying and Estimating Time-Series-Cross-Section Models,’’ 6 Political Analysis 1–36.
Blonigen, Bruce A. (2005). “A review of the empirical literature on FDI determinants,” Atlantic Economic Journal, 33, 4, pp. 383–403.
Blonigen, Bruce A. and Miao Wang (2005). “Inappropriate pooling of wealthy and poor countries in empirical FDI studies,” in Theodore H. Moran, Edward M. Graham and Magnus Blomström, eds., Does Foreign Direct Investment Promote Development? (Washington, D.C.: Institute for International Economics), pp. 221–244.
Buthe, Tim and Helen Milner (2008). The Politics of Foreign Direct Investment into Developing Countries: Increasing FDI through International Trade Agreements?" American Journal of Political Science 52, no.4 (October): 741-62.
Desbordes, Rodolphe, Julia Darby, and Ian Wooten (2011). “Institutional Quality and FDI to the South: An Analytical Approach.” Strathclyde Working Paper in Economics. No. 11-31.
Egger, Peter and Michael Pfaermayer (2009). The Impact of Bilateral Investment Treaties on Foreign Direct Investment. In Karl P. Sauvant and Lisa E. Sachs, editors, The Effects of Treaties on Foreign Direct Investment. Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows. Oxford, UK: Oxford University Press.
Eid, Florence (2008). The New Face of Arab Investment. In John Nugee and Paola Subacchi, editors, The Gulf Region: A New Hub of Global Financial Power. Chatham House: Royal Institute of International Affairs.
Elkins, Zachary, Andrew T. Guzman and Beth A. Simmons (2006). “Competing for capital: the diffusion of bilateral investment treaties, 1960-2000,” International Organization, 60, 4, pp. 811– 846.
Faras, Reyadh and Khalifa Ghali (2009). “Foreign Direct Investment and Economic Growth: The Case of the GCC Countries.” International Research Journal of Finance and Economics. Issue 29.
Goldstein, Judith and Lisa L. Martin (2000). “Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note.” International Organization 54, 3, pp. 603–632.
Guzman, Andrew T. (1998). “Why LDCs sign treaties that hurt them: explaining the popularity of bilateral investment treaties,” Virginia Journal of International Law, 38, 4, pp. 639–688.
Hafner-Burton, Emilie, Miles Kahler, and Alexander H. Montgomery (2009). “Network Analysis for International Relations,” International Organization, 63, 3, p. 559-92
Haftel, Yoram Z. (2008). “The effect of U.S. BITs on FDI inflows to developing countries: signaling or credible commitment?” (Unpublished manuscript, University of Illinois, Chicago).
Hallward-Driemeier, Mary (2009). Do Bilateral Investment Treaties Attract FDI? Only a Bit... and they could bite. In Karl P. Sauvant and Lisa E. Sachs, editors, The Effects of Treaties on Foreign Direct Investment. Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows. Oxford, UK: Oxford University Press.
Hoekman, Bernard and Khalid Sekkat (2008). “Deeper Integration of Goods, Services, Capital and Labor Markets: A Policy Research Agenda for the MENA Region.” Policy Research ReportsPRR32. Cairo Egypt: Economic Research Forum.
Jandhyala, Srividya, Henisz, Witold J. and Mans_eld Edward (2008). Pooling Dyads is a BIT Inappropriate: A Two Stage Model for Bilateral Investment Treaty Signing." Paper presented at the Annual Meeting of the American Political Science Association, Boston, August 28-31, 2008.
Mayda, Anna Maria and Chad Steinberg (2009). “Do South-South Preferential Trade Agreements Increase Trade? Commodity-level Evidence from COMESA.” Canadian Journal of Economics. Vol. 42, No. 4.
Milner, Helen, and Tim Buthe (2009) “Bilateral Investment Treaties and Foreign Direct Investment: A Political Analysis.” The Impact of Bilateral Investment Treaties and Double Taxation Treaties on Foreign Direct Investment. Karl Sauvant, ed., NY: Oxford University Press.
Neumayer, Eric and Laura Spess (2005). “Do bilateral investment treaties increase foreign direct investment to developing countries?” World Development, 33, 10, pp. 1567–1585.
Pinto, Pablo, Santiago Pinto, Nicolas E. Stier-Moses (2010) “Regulating Foreign Investment: A Study of the Properties of Bilateral Investment Regimes.” Paper prepared for presentation at the Annual Meeting of the International Political Economy Society, Cambridge, MA, November 12-13, 2010.
Poulsen, Lauge Skovgaard (2010). “The Politics of South-South Bilateral Investment Treaties.” In The Politics of International Economic Law. T. Broude, A. Porges, and M. Busch (eds.). Cambridge University Press.
Rose-Ackerman, Susan (2009). The Global BITs Regime and the Domestic Environment for Investment. In Karl P. Sauvant and Lisa E. Sachs, editors, The Effects of Treaties on Foreign Direct Investment. Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows. Oxford, UK: Oxford University Press.
Salacuse, Jeswald W. and Nicholas P. Sullivan (2005). “Do BITs really work? An evaluation of bilateral investment treaties and their grand bargain,” Harvard International Law Journal, 46, 1,pp. 67–130.
Swenson, Deborah (2009). Why Do Developing Countries Sign BITs? In Karl P. Sauvant and Lisa E. Sachs, editors, The Effects of Treaties on Foreign Direct Investment. Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows. Oxford, UK: Oxford University Press.
Tobin, Jennifer and Susan Rose-Ackerman (2005). “Foreign direct investment and the business environment in developing countries: The impact of bilateral investment treaties,” Yale Law & Economics Research Paper, No. 293, May 2.
UNCTAD, United Nations Conference on Trade and Development (2005). “South-South Cooperation in International Investment Agreements.” UNCTAD Series on International Investment Policies for Development. www.unctad.org
UNCTAD, United Nations Conference on Trade and Development (2008). “Recent developments in international investment agreements (2007–June 2008).” IIA Monitor, No. 2 (UNCTAD/WEB/DIAE/IA/2008/1)
United Nations Conference on Trade and Development (2009). The Impact on Foreign Direct Investment of BITs. Geneva: United Nations.
United Nations (2010). “World Investment Report 2010: Investing in a Low Carbon Economy.” Geneva: United Nations.
United Nations (2011) “World Investment Report 2011: Non-Equity Modes of International Production and Devlopment.” http://www.unctad-docs.org/files/UNCTAD-WIR2011-Fullen.pdf.
Yackee, Jason (2009). Do BITs Really Work? Revisiting the Empirical Link between Investment Treaties and Foreign Direct Investment. In Karl P. Sauvant and Lisa E. Sachs, editors,The Effects of Treaties on Foreign Direct Investment. Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows. Oxford, UK: Oxford University Press.
_||_
