Beyond FDI: The Influence of Bilateral Investment Treaties on Debt

Mina, Wasseem (2012): Beyond FDI: The Influence of Bilateral Investment Treaties on Debt.

Abstract

This paper examines theoretically and empirically the role of political risk guarantees, which bilateral investment treaties serve, in debt accumulation in low and middle income countries. The paper empirically finds that signed bilateral investment treaties with OECD countries have a positive influence on total and guaranteed debt accumulation, under system GMM and OLS estimation methodologies. Results suggest that the role of bilateral investment treaties extends beyond attracting FDI to international lending.

• Item Type: MPRA Paper
• Language: English
• Keywords: Debt; debt guarantees; political risk; default risk; bilateral investment treaties
• Subjects: F - International Economics > F3 - International Finance > F34 - International Lending and Debt Problems; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; K - Law and Economics > K3 - Other Substantive Areas of Law > K33 - International Law

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