in The Effect of Treaties on Foreign Direct Investment: Bilateral Investment Treaties, Double Taxation Treaties, and Investment Flows (Sauvant & Sachs, eds. 2009)
Abstract
In this article I replicate, expand, and critique an earlier analysis by Neumayer and Spess claiming to have identified strong evidence that developing countries that sign bilateral investment treaties (BITs) enjoy massive increases in foreign direct investment (FDI). In the face of a series of relatively small but very justifiable changes in methodology and model specification the apparently positive effect of BITs on FDI largely (and in some cases entirely) falls from statistical significance. I conclude that the case for BITs is far weaker than Neumayer and Spess suggest.
