| ID | 128267 |
| Title Proper | Foreign direct investment and institutional diversity in trade agreements |
| Other Title Information | credibility, commitment, and economic flows in the developing world, 1971-2007 |
| Language | ENG |
| Author | Buthe, Tim ; Milner, Helen V |
| Publication | 2014. |
| Summary / Abstract (Note) | 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. |
| `In' analytical Note | World Politics Vol.66, No.1; January 2014: p.88-122 |
| Journal Source | World Politics Vol.66, No.1; January 2014: p.88-122 |
| Key Words | International Investment ; Foreign Direct Investment - FDI ; Bilateral Investment Treaties - BIT ; Political Safeguard ; Economic Safeguard ; Trade Agreements ; Economic Growth ; Economic Regime ; Economic Cooperation ; Global Economy ; Unilateral Policy ; Domestic Economy ; International Investment Regime - IIR ; Dyadic Bargaining Power ; Economic Downturns ; Economic Flow ; Developing Countries ; Institutional Diversity ; Trade Agreements Credibility ; Preferential Trade Agreements - PTA ; International Trade Agreement - ITA ; World Trade Organisation - WTO |