Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283594 
Year of Publication: 
2024
Series/Report no.: 
CEPIE Working Paper No. 01/24
Publisher: 
Technische Universität Dresden, Center of Public and International Economics (CEPIE), Dresden
Abstract: 
We analyze the effect of bilateral investment treaties (BITs) on bilateral foreign portfolio investment in equity and debt securities. We find that expropriation risk and the level of a BIT's investor protection are complementary. Applying a Poisson Pseudo-Maximum-Likelihood model to a panel of 60 home and 39 host countries from 2002 to 2017, we find that host countries receive 40% more bilateral equity investment when they protect foreign investors with a BIT. This effect almost doubles when investment protection of BITs is strong, and the political risk of the host country is high.
Subjects: 
Bilateral investment treaties
Bilateral portfolio investment
Political risk
Investor protection
Emerging markets
JEL: 
F32
G15
K33
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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