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The effect of BITs, a two-sided story

Lundblad, Emmy LU (2016) NEKH03 20161
Department of Economics
Abstract
Bilateral Investment Treaty is an agreement designed to increase FDI between signatories. Historically the treaty is concluded between a developed country and a developing country, as a risk-lowering instrument. In recent years agreements carried out between developed countries has put more focus on investments and adopted contents of a BIT, examples of this is TTIP, TPP and CETA. Yet there is little evidence that these functions would in fact be beneficial in a developed context. Existing literature is limited to the relationship between developed and developing countries. Through a gravity model analysis this thesis tests the difference in effect of ratifying a BIT on FDI outflows from 31 OECD countries into 187 developing and developed... (More)
Bilateral Investment Treaty is an agreement designed to increase FDI between signatories. Historically the treaty is concluded between a developed country and a developing country, as a risk-lowering instrument. In recent years agreements carried out between developed countries has put more focus on investments and adopted contents of a BIT, examples of this is TTIP, TPP and CETA. Yet there is little evidence that these functions would in fact be beneficial in a developed context. Existing literature is limited to the relationship between developed and developing countries. Through a gravity model analysis this thesis tests the difference in effect of ratifying a BIT on FDI outflows from 31 OECD countries into 187 developing and developed host countries. The main findings confirm that the effect of a BIT between two developed countries is lower and in fact not apparent, in comparison to a BIT between a developed and a developing country in respect to FDI flows. The results are applicable on the debate concerning the content of TTIP and similar agreements. It also opens up for further research on this uncharted subject. (Less)
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author
Lundblad, Emmy LU
supervisor
organization
course
NEKH03 20161
year
type
M2 - Bachelor Degree
subject
keywords
BIT, Gravity model, FDI, Developed countries, TTIP
language
English
id
8889249
date added to LUP
2016-09-09 15:47:44
date last changed
2016-09-09 15:47:44
@misc{8889249,
  abstract     = {Bilateral Investment Treaty is an agreement designed to increase FDI between signatories. Historically the treaty is concluded between a developed country and a developing country, as a risk-lowering instrument. In recent years agreements carried out between developed countries has put more focus on investments and adopted contents of a BIT, examples of this is TTIP, TPP and CETA. Yet there is little evidence that these functions would in fact be beneficial in a developed context. Existing literature is limited to the relationship between developed and developing countries. Through a gravity model analysis this thesis tests the difference in effect of ratifying a BIT on FDI outflows from 31 OECD countries into 187 developing and developed host countries. The main findings confirm that the effect of a BIT between two developed countries is lower and in fact not apparent, in comparison to a BIT between a developed and a developing country in respect to FDI flows. The results are applicable on the debate concerning the content of TTIP and similar agreements. It also opens up for further research on this uncharted subject.},
  author       = {Lundblad, Emmy},
  keyword      = {BIT,Gravity model,FDI,Developed countries,TTIP},
  language     = {eng},
  note         = {Student Paper},
  title        = {The effect of BITs, a two-sided story},
  year         = {2016},
}