Affiliation:
1. Department of Applied Economics HSE University Moscow Russia
2. Centre for Comprehensive European and International Studies HSE University Moscow Russia
Abstract
AbstractIndia initiated the unilateral mass termination of bilateral investment treaties (BIT termination) in 2016. We consider it a natural experiment to clarify the issue of whether BITs attract foreign direct investment (FDI) to a developing country. We evaluate the effect of BIT termination on the FDI inflows using the double and triple difference approaches (DD and DDD) and the synthetic control (SCM) methods. Our study finds that BIT termination led to a significant decrease in FDI inflows from the country with which India terminated the agreement. Thus, the study confirms that BIT is an essential mechanism for attracting FDI.
Subject
Economics, Econometrics and Finance (miscellaneous),Economics and Econometrics