International Trade and Investment Agreements and Foreign Direct Investment Activities in Developing and Emerging Economies

Foreign companies often forego high profile corporate investments in developing markets fearing regulatory opacity, investment barriers, or political instability. Host and investor home governments can develop appropriate strategies to mitigate such risks and attract FDI into these markets. One policy tool available to achieve this goal is bilateral or multi-lateral investment agreements. This study focuses on bilateral investment treaties and preferential trade and investment agreements and explores if and under which conditions these treaties promote different types of foreign direct investment. The empirical evidence involves Japanese multinational firms' activities abroad.