TY  - JOUR
AB  - Purpose The aim of this paper first is to go beyond the static effects of bilateral investment treaties (BITs) and empirically estimate the marginal effects of the stock of BITs on foreign direct investment flows.Design/methodology/approach These statistical models use a gravity equation.Findings This paper finds that BITs is subject to diminishing returns measured in terms of FDI flows. Diminishing returns are more pronounced among country-pairs that have not signed BITs but have their own BIT network than among country-pairs with their own BITs.Research limitations/implications The subsidiary finding is that a measure of a country’s BIT network characteristic, capturing conditions favorable for a mix of horizontally and vertically integrated activities, may be the limiting force underlying the diminishing returns of the stock of BITs.Originality/value For a given country’s BIT network, a multinational enterprise finds more value in investing where a bilateral treaty is in place. This suggests either stronger property-rights protection or greater latitude to use the host country as an export platform.
VL  - 25
IS  - 2
SN  - 1525-383X
DO  - 10.1108/MBR-04-2017-0024
UR  - https://doi.org/10.1108/MBR-04-2017-0024
AU  - Oh Chang Hoon
AU  - Fratianni Michele
PY  - 2017
Y1  - 2017/01/01
TI  - On the optimal size of bilateral investment treaty network in foreign direct investment flows
T2  - Multinational Business Review
PB  - Emerald Publishing Limited
SP  - 150
EP  - 170
Y2  - 2024/04/23
ER  -