In indicators. For example, Rodolphe and Vincent

In order to strengthen the economic ties internationally and improve the global economic stability, BITs are functioning from two aspects. First of all, BITs provide foreign investors fair-and-equitable,non-discriminatory, and national treatment (UNCTAD 2007). Moreover, they offer foreign investors rights to sue host governments if the government is involved in expropriation of property, as well as include the compensation for expropriated property and free transfer and repatriation of capital and profit (9).Secondly,rather implementing dispute within the host government settlement, BIT provisions create a third party dispute settlement mechanism to solve international arbitration(12).

These transparent treatments and ensurances rebuild foreign investors’ confidence and thus BITs are considered to reduce both the risk and the cost of investing abroad(14).However strangely, similar BITs provisions studied by different scholars originated various empirical conclusions. Hallward-Driemeier (2003), Tobin and Rose-Ackerman (2005),Gallagher and Birch (2006), and Aisbett (2009) find little economically and statistically significant effect of BITs on FDI flows. By contrast, Egger And Pfaffermayr (2004a), Salacuse and Sullivan (2005), Neumayer and Specs (2005), and Buthe and Milner (2009) find economically and statistically significant effects.

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Moreover, not just because of the protection and dispute settlement of BIT provision, researchers and economic scientists also seek to find relevance of BITs and FDI flows among every indicators. For example, Rodolphe and Vincent were curious about whether the influence of BITs on FDI was depended on the domestic institutional quality (2007). Deborah analysed the effect of BITs on trade integration of pater countries by focusing on the multinational firms activities, which is neglected by previous studies about FDI flows (2008). Through some feedback of a series of interviews, Lauge N was for the relevance between BITs and FDI flows, but challenged the necessity of BIT in terms of political risk perspective(2010).

Liesbeth and Andrea examined which industries and their FDI flows were closely tied with the promotion of BITs (2012). 


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