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51 Va. J. Int'l L. 397 (2010-2011)
Do Bilateral Investment Treaties Promote Foreign Direct Investment - Some Hints from Alternative Evidence

handle is hein.journals/vajint51 and id is 401 raw text is: Do Bilateral Investment Treaties Promote Foreign Direct Investment? Some Hints from Alternative Evidence JASON WEBB YACKEE One of the most important empirical questions today in international economic law is whether bilateral investment treaties (BITs) are likely to promote inflows of foreign direct investment (FDI). This Article presents a novel, multi-method examination of that question. Using regression analysis, I show that BITs are not meaningfully correlated with measures of political risk. Using survey evidence, I show that providers of political risk insurance do not reliably take BITs into account when deciding the terms of insurance. Nor do in-house counsel in large U.S. corporations view BITs as playing a major role in their companies' foreign investment decisions. In contrast to existing empirical studies, which claim to prove that BITs can have massive positive impacts on FDI, my results suggest that such results may be spurious. It appears that BITs are unlikely to significantly drive foreign investment. * Assistant Professor of Law, University of Wisconsin Law School. Thanks to the University of Wisconsin Center for World Affairs and the Global Economy for providing financial assistance, to John Matthew Linstroth and Naya Mukheji for excellent research assistance, and to Darian Ibrahim, Mark Weidemaier, Anuj Desai, Rachel Brewster, and Amanda Perry for helpful comments. Susan Franck provided valuable encouragement as well. Earlier versions of this research were presented at the UW Law School Ideas and Innovations Seminar Series, the Midwest Political Science Association 2010 National Conference, the Law and Society Association's 2010 Annual Meeting, and a workshop at the London School of Economics and Political Science that was organized by Anthea Roberts. I may be contacted at jason.yackee@alumni.duke.edu.

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