Economic Policy Uncertainty, Bilateral Investment Treaties, and Chinese Outward Foreign Direct Investment

IF 1.4 4区 社会学 Q1 AREA STUDIES Pacific Affairs Pub Date : 2021-09-01 DOI:10.5509/2021943519
Yue Lu, Linghui Wu, K. Zeng
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引用次数: 3

Abstract

This paper examines the effect of bilateral investment treaties (BITs) in promoting Chinese outward foreign direct investment (COFDI) in the presence of rising economic policy uncertainty in China's partner countries. We postulate that the signing of BITs should help stimulate COFDI because the treaties send a credible signal to foreign investors about the host country's intent to protect Chinese investment, and make it more difficult for the host country to violate its treaty obligations. BITs that contain rigorous investment protection and liberalization provisions, in particular, should be more likely to encourage COFDI as they directly influence Chinese investors' expectations about the stability, predictability, and security of the host market. However, while BITs generally promote COFDI, host country economic policy uncertainty may also limit their effectiveness. This is because uncertainty tends to undermine investor confidence, trigger capital flows from high- to low-risk countries, and dampen commercial activities. Poisson pseudo-maximum likelihood (PPML) estimation models of the determinants of COFDI to 188 countries between 2003 and 2017 lend substantial support to our conjectures.
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经济政策不确定性、双边投资协定与中国对外直接投资
本文考察了双边投资协定(BITs)在中国伙伴国经济政策不确定性上升的情况下促进中国对外直接投资(COFDI)的效果。我们认为,双边投资协定的签署应该有助于刺激COFDI,因为这些条约向外国投资者发出了东道国保护中国投资意图的可信信号,并使东道国更难以违反其条约义务。特别是包含严格投资保护和自由化条款的双边投资协定更有可能鼓励外国直接投资,因为它们直接影响中国投资者对东道国市场稳定性、可预测性和安全性的预期。然而,虽然双边投资协定通常促进COFDI,但东道国经济政策的不确定性也可能限制其有效性。这是因为不确定性往往会削弱投资者信心,引发资本从高风险国家流向低风险国家,并抑制商业活动。2003年至2017年期间188个国家COFDI决定因素的泊松伪最大似然(PPML)估计模型为我们的推测提供了有力支持。
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来源期刊
Pacific Affairs
Pacific Affairs AREA STUDIES-
CiteScore
1.60
自引率
12.50%
发文量
18
期刊介绍: Pacific Affairs has, over the years, celebrated and fostered a community of scholars and people active in the life of Asia and the Pacific. It has published scholarly articles of contemporary significance on Asia and the Pacific since 1928. Its initial incarnation from 1926 to 1928 was as a newsletter for the Institute of Pacific Relations (IPR), but since May 1928, it has been published continuously as a quarterly under the same name. The IPR was a collaborative organization established in 1925 by leaders from several YMCA branches in the Asia Pacific, to “study the conditions of the Pacific people with a view to the improvement of their mutual relations.”
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