The Effect Of Bilateral Investment Treatie On The Flow Foreign Direct Investment In Developing Countries

Developing countries regulate bilateral investment agreements to attract foreign direct investment and see it as an international legal mechanism to encourage foreign investors.. Thus the present study aims to investigate the impact of bilateral investment agreements on the flow of foreign direct investment . Therefore, following the study of ERIC NEUMAYER and LAURA SPES  (2005), data from 51 developing countries in the period 2002-2007 were collected and analyzed through data panel econometric models and EVIEWS software. The results showed: a ) Developing countries that conclude more BITs with developed countries receive more FDI flows b ) The positive effect of BIT signature is greater when the ICRG composite index is low, ie in a high-risk environment. It is important to note that while the positive effect of BIT on FDI as a political risk is reduced, the impact is always positive even at very low levels of risk  c ) The term interaction between political constraints and the variable of bilateral investment treaties is negligible, while with government stability is negative and significant. d ) The interactive expression between organizational quality and the BIT variable is statistically significant with a negative sign.This shows that the performance of BIT is suitable as an alternative to high organizational quality.