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Foreign Direct Investment and Institutional Diversity in Trade Agreements: Credibility, Commitment, and Economic Flows in the Developing World, 1971–2007

World politics, 2014-01, Vol.66 (1), p.88-122 [Peer Reviewed Journal]

Copyright © Trustees of Princeton University 2014 ;Copyright 2014 ©Trustees of Princeton University ;Copyright © Trustees of Princeton University ;ISSN: 0043-8871 ;EISSN: 1086-3338 ;DOI: 10.1017/S0043887113000336 ;CODEN: WOPOBI

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Title:
Foreign Direct Investment and Institutional Diversity in Trade Agreements: Credibility, Commitment, and Economic Flows in the Developing World, 1971–2007
Author: Büthe, Tim ; Milner, Helen V.
Subjects: 20th century ; Bargaining ; Büthe, Tim ; Commercial treaties ; Credibility ; Developing Countries ; Domestic trade ; Economic conditions ; Economic growth models ; Foreign direct investment ; Foreign direct investments ; Foreign Investment ; Foreign investments ; Government ; Gross domestic product ; Institutional investments ; International Cooperation ; International disputes ; International Law ; International politics ; International Trade ; Investment ; Investments, Foreign ; Investors ; Law and legislation ; LDCs ; Most favored nation clause ; Symposium: The Regime for International Investment—Foreign Direct Investment, Bilateral Investment Treaties, and Trade Agreements ; Trade agreements
Is Part Of: World politics, 2014-01, Vol.66 (1), p.88-122
Description: International trade agreements lead to more foreign direct investment (FDI) in developing countries. This article examines the causal mechanisms underpinning this trade-investment linkage by asking whether institutional features of preferential trade agreements (PTAs), which allow governments to make more credible commitments to protect foreign investments, indeed result in greater FDI. The authors explore three institutional differences. First, they examine whether PTAs that have entered into force lead to greater FDI than PTAs that have merely been negotiated and signed, since only the former constitute a binding commitment under international law. Second, they ask whether trade agreements that have investment clauses lead to greater FDI. Third, they consider whether PTAs with dispute-settlement mechanisms lead to greater FDI. Analyses of FDI flows into 122 developing countries from 1971 to 2007 show that trade agreements that include stronger mechanisms for credible commitment induce more FDI. Institutional diversity in international agreements matters.
Publisher: Cambridge, UK: Cambridge University Press
Language: English
Identifier: ISSN: 0043-8871
EISSN: 1086-3338
DOI: 10.1017/S0043887113000336
CODEN: WOPOBI
Source: AUTh Library subscriptions: ProQuest Central

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Foreign Direct Investment and Institutional Diversity in Trade Agreements: Credibility, Commitment, and Economic Flows in the Developing World, 1971–2007

Copyright © Trustees of Princeton University 2014 ;Copyright 2014 ©Trustees of Princeton University ;Copyright © Trustees of Princeton University ;ISSN: 0043-8871 ;EISSN: 1086-3338 ;DOI: 10.1017/S0043887113000336 ;CODEN: WOPOBI

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