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dc.contributor.authorBergstrand, Jeffrey H.en_US
dc.contributor.authorEgger, Peteren_US
dc.date.accessioned2011-07-22en_US
dc.date.accessioned2011-09-14T13:13:03Z-
dc.date.available2011-09-14T13:13:03Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/49501-
dc.description.abstractBilateral investment treaties (BITs) have proliferated over the past 50 years such that the number of pairs of countries with BITs is roughly as large as the number of country-pairs that belong to bilateral or regional preferential trade agreements (PTAs). The purpose of this study is to provide the first systematic empirical analysis of the economic determinants of BITs and of the likelihood of BITs between pairs of countries using a qualitative choice model, and in a manner consistent with explaining PTAs. We develop the econometric specification for explaining the two based upon a general equilibrium model of world trade and foreign direct investment with three factors, two products, and explicit natural as well as policy trade and investment costs among multiple countries in the presence of national and multinational firms. The empirical model for BITs and PTAs is bivariate in nature and supports a set of hypotheses drawn from the general equilibrium model. Using the preferred empirical model, we correctly predict approximately 85 (75) percent of all BITs (PTAs) correctly, relative to an unconditional probability of only 11 (16) percent.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper: Trade Policy 3514en_US
dc.subject.jelF10en_US
dc.subject.jelF20en_US
dc.subject.ddc330en_US
dc.subject.keywordbilateral investment treatiesen_US
dc.subject.keywordforeign direct investmenten_US
dc.subject.keywordmultinational firmsen_US
dc.subject.keywordfree trade agreementsen_US
dc.subject.keywordinternational tradeen_US
dc.subject.stwInvestitionsgarantieen_US
dc.subject.stwInternationale Wirtschaftsbeziehungenen_US
dc.subject.stwFreihandelszoneen_US
dc.subject.stwDirektinvestitionen_US
dc.subject.stwMultinationales Unternehmenen_US
dc.subject.stwAllgemeines Gleichgewichten_US
dc.subject.stwSchätzungen_US
dc.subject.stwWelten_US
dc.titleWhat determines BITs?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn664390978en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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