Variation in Bilateral Investment Treaty Provisions and Foreign Direct Investment Flows to China, 1997–2011

This article examines the differentisal effects of specific provisions included in China’s bilateral investment treaties (BITs) in inducing foreign direct investment (FDI). Empirical analysis yields some evidence suggesting that while the signing of a BIT does not necessarily boost FDI, the entry into force of a BIT does exert a strong effect on investment flows. More importantly, we find substantial evidence that BITs with stronger investment protection provisions such as absolute and relative standards of treatment and dispute settlement procedures are more likely to induce greater FDI flows. These results suggest that the variation in the institutional design of bilateral investment treaties strongly influences FDI flows by shaping foreign investors’ expectations of their asset security and the overall stability of the host country investment environment.

本文探讨中国双边投资协定（BITs）中的特定条款在吸引外商直接投资（FDI）方面的差异化影响。实证分析得到若干证据表明：尽管签署双边投资协定未必能推动外商直接投资，但协定生效后确实会对投资流动产生显著影响。更为重要的是，我们发现充分证据显示，包含更强投资保护条款（如绝对待遇与相对待遇标准、争端解决程序）的双边投资协定，更有可能拉动更多的外商直接投资流动。上述结果表明，双边投资协定的制度设计差异，会通过塑造外国投资者对其资产安全的预期以及东道国投资环境的整体稳定性，显著影响外商直接投资流动。