Working Paper

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

Kiel Working Papers, 1621

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.


Axel Berger
Matthias Busse
Peter Nunnenkamp
Martin Roy


Publication Date
JEL Classification
F21, F23, K33