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26 Jul 2010

Do the European Union’s bilateral investment treaties matter?

Selen Sarisoy Guerin

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This working paper addresses a number of policy-relevant issues regarding the EU’s bilateral investment treaties (BITS), namely, whether the EU’s BITs have a significantly positive impact on outflows; and which member states and which BIT partners have had a significant experience after the implementation of the BIT. The author finds that both OECD BITs and EU BITs have a statistically significant and positive impact on FDI outflows. This result is robust to the inclusion of variables such as privatisation proceeds that control for the level of economic reform, the level of trade linkages, the level of democratic freedom and a measure of risk of expropriation among other standard controls. A number of policy implications of these findings are also considered.

Selen Sarisoy Guerin is Senior Researcher at the Institute of European Studies, Vrije Universiteit, Brussels.