Abstract
The international investment agreements (IIAs) are a strategic policy instrument that member countries could use to achieve win-win cooperation. Meanwhile, the extension of the Association of Southeast Asian Nations (ASEAN) membership toward the Regional Comprehensive Economic Partnership (RCEP) membership has induced the rich and deep investment agreement that challenges the ASEAN countries to take advantage. This study demonstrates the effects of investment provisions in international investment agreements on the bilateral foreign direct investment (FDI) in the RCEP economies. It also investigates the effect of ASEAN membership on investment creation and investment diversion toward the RCEP region. Using panel data on RCEP countries during the period 2009 to 2018 and a Driscoll-Kraay standard errors estimator, the results show that the re-lationship between inward FDI and investment provisions in IIAs are positive and significant. Likewise, the investment protection, and promotion provisions in bilateral investment treaties have positive and significant effects on the inward FDI. Moreover, the findings indicate that the ASEAN membership tends to cause the investment creation toward the RCEP region; and it is a stepping stone on the road to the investment policy framework for sustainable development.
Highlights
The International investment agreements are an important instrument driving foreign investment activities
This study aims to examine the effects of international investment agreements on bilateral foreign investment by using the panel dataset that consists of bilateral foreign direct investment (FDI) from ten Association of Southeast Asian Nations (ASEAN) countries plus six Regional Comprehensive Economic Partnership (RCEP) countries (240 bilateral countries) for the period of
The results of the estimation with bilateral inward FDI as the dependent variable are expressed in Models (1) to (4), whereas the results with bilateral outward FDI as the dependent variable are shown in Models (5) to (8)
Summary
The International investment agreements are an important instrument driving foreign investment activities. As of December 2020, more than 2600 international investment agreements were in force, with 2342 bilateral investment treaties (BITs) and 322 treaties with investment provision (TIPs) (UNCTAD 2020b). Countries with the highest number of IIAs were China, followed by South Korea, Malaysia, Singapore, Vietnam, and Thailand. The average inward FDI and outward FDI as percentages of GDP in the RCEP in 2019 were approximately 71% and 35%, respectively (Figure 2). Singapore was the largest recipient of FDI inflows in the RCEP region, with approximately 469% of GDP
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
