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A BIT Far?: Geography, International Economic Agreements, and Foreign Direct Investment - Evidence from Emerging Markets

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dc.contributor.authorGomez-Mera, Laura
dc.contributor.authorVarela, Gonzalo J.
dc.date.accessioned2017-09-21T18:31:32Z
dc.date.available2017-09-21T18:31:32Z
dc.date.issued2017-09
dc.description.abstractHow do international economic agreements influence the investment patterns of firms from emerging economies? This paper studies the ways in which bilateral investment treaties and preferential trade agreements interact with geographic and cultural distance to influence firms' investment patterns. How does geographic and cultural proximity affect the impact of international economic agreements on foreign direct investment flows? This question is answered using data from an original survey of 700 firms from four emerging (or newly-emerged) economies: Brazil, India, the Republic of Korea, and South Africa. The findings suggest that bilateral investment treaties and preferential trade agreements increase the likelihood of foreign direct investment. Yet, the effects of these agreements on foreign direct investment depend on the distance between the origin and potential destination countries. Moreover, trade and investment agreements appear to interact differently with distance. By providing guarantees to investors and signaling credible commitment from host governments, bilateral investment treaties mitigate the higher uncertainty and transaction costs associated with investing in faraway, unfamiliar markets. By contrast, the investment attraction effectiveness of preferential trade agreements fades with distance.en
dc.identifierhttp://documents.worldbank.org/curated/en/734061504793009047/A-bit-far-geography-international-economic-agreements-and-foreign-direct-investment-evidence-from-emerging-markets
dc.identifier.doi10.1596/1813-9450-8185
dc.identifier.urihttps://hdl.handle.net/10986/28362
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 8185
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectFOREIGN DIRECT INVESTMENT
dc.subjectBILATERAL INVESTMENT TREATY
dc.subjectPREFERENTIAL TRADE AGREEMENT
dc.subjectDISTANCE
dc.subjectEMERGING MARKET MULTINATIONALS
dc.titleA BIT Far?en
dc.title.subtitleGeography, International Economic Agreements, and Foreign Direct Investment - Evidence from Emerging Marketsen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleA BIT Far? Geography, International Economic Agreements, and Foreign Direct Investment: Evidence from Emerging Markets
okr.date.disclosure2017-09-07
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/734061504793009047/A-bit-far-geography-international-economic-agreements-and-foreign-direct-investment-evidence-from-emerging-markets
okr.guid734061504793009047
okr.identifier.doi10.1596/1813-9450-8185
okr.identifier.doihttps://doi.org/10.1596/1813-9450-8185
okr.identifier.externaldocumentum090224b084f73dd3_1_0
okr.identifier.internaldocumentum27964233
okr.identifier.reportWPS8185
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/734061504793009047/pdf/WPS8185.pdfen
okr.region.administrativeAfrica
okr.region.administrativeEast Asia and Pacific
okr.region.administrativeLatin America & Caribbean
okr.region.administrativeSouth Asia
okr.statistics.combined2254
okr.statistics.dr734061504793009047
okr.statistics.drstats1896
okr.topicInternational Economics and Trade::Foreign Direct Investment
okr.topicInternational Economics and Trade::International Trade and Trade Rules
okr.topicInternational Economics and Trade::Trade Finance and Investment
okr.topicInternational Economics and Trade::Trade and Multilateral Issues
okr.unitTrade and Competitiveness Global Practice Group
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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