A Study Based On Determinants And Investment Effects Of The Bilateral Investment Treaties' Depth

China has always adhered to the opening-up strategy of “bringing in and going out”,actively integrated into the world economic division of labor system,and made full use of international markets and domestic markets to promote economic growth.China has made remarkable achievements,ranking among the world's top three in terms of both China's inward foreign direct investment and outward foreign direct investment(OFDI).However,since the 2008 financial crisis,trade protectionism has risen,international economic policy uncertainty has increased,China's OFDI growth has slowed down,and investment failure cases have increased.With the absence of multilateral international investment agreements,the “spaghetti bowl” bilateral investment treaties(BITs)have become an important tool for countries to manage foreign direct investment,and international investment rules are facing a new round of reconstruction.At the same time,the existing research on the determinants and investment effects of BITs are still insufficient.First,the number of evaluated BITs is small,the time is early,and the index system is not perfect.It is difficult to reflect the new changes in BITs provisions.Second,there is little research on the determinants of BITs heterogeneity,and the internal motivation of the evolution of BITs provisions remains to be discussed.Third,the research on investment effects of BITs often ignores the impact of other treaties with investment provisions and BITs signed between the host country and third parties,which may lead to the error of omission variable,and the research conclusions have not been unified.In view of this,this paper uses the latest data of UNCTAD's “IIA Mapping” to evaluate the BITs' depth,that is the degree of investment promotion,investment liberalization and investment protection of BITs,calculates 2539 the BITs depth from1959 to 2018,and analyzes the evolution characteristics of the BITs' depth in the world.Secondly,it theoretically and empirically tested the influence of the host country,the home country,and the financial crisis on the BITs' depth by constructing a dual game model and a processing effect model.Thirdly,based on the gravity model of international direct investment,this paper empirically tests the effect of China's BITs signed between China and the host country,and host country's BITs signed between the host country and third country on China's OFDI.Furthermore,the heterogeneity of investment effects of BITs was investigated from four aspects: the depth of BITs provisions,the macroeconomic environment,the economic development level of the host country and the countries along the “Belt and Road”.Finally,the influence mechanism of BITs is revealed by testing the intermediary effect model of investment risks and international investment disputes of host country.The results show that:(1)Since the birth of BITs in 1959,its depth has experienced three stages: rising volatility,stable high level and decreasing year by year.In particular,after the 2008 financial crisis,the application scope of BITs has narrowed,treatment standards have declined and non-economic requirements have increased.The BITs' depth has fallen to the level of the 1960 s and '70s,and 67% of countries(regions)signed BITs have shown a trend of de-globalization.(2)The BITs' depth is affected by the location advantages of host country and the ownership advantages of home country.Specifically,the location advantages of the host country's labor and natural resources have a significant inhibitory effect on the BITs' depth,while the ownership advantages of the home country's capital,technology and institutional quality have a significant promoting effect on the BITs' depth.Further research found that the financial crisis is an important reason for the decline of the BITs' depth,and the role of home country's ownership advantages in promoting the BITs depth is more prominent after the 2008 financial crisis.(3)The depth of China's BITs directly or indirectly promotes China's OFDI through the commitment effect,enhancing bilateral political relations,and weakening the investment risk of the host country.The investment effect of China's BITs has a phenomenon of diminishing returns to scale.Among them,increasing the depth of the application scope of China's BITs by adding favorable terms for investors can significantly promotes China's OFDI.While increasing the depth of the non-economic requirements of China's BITs by reducing the unfavorable terms for investors significantly inhibits China's OFDI.(4)The depth of host country's BITs indirectly affects China's OFDI through the signaling effect,reducing the investment risk of the host country,and leading to international investment disputes.Among them,the depth of the application scope of the host country's BITs has a significant promoting effect on China's OFDI;the depth of the investment dispute settlement mechanism has a significant inhibitory effect on China's OFDI.This paper used the “IIA Mapping” data to study the BITs' depth for the first time,which enriched the research methods and measurement scope of BITs evaluation,made up for the lacks of theoretical and empirical research on determinants of the BITs' depth,and expanded the empirical research on the investment effect of international investment rules.The results of the study provided theoretical basis and empirical evidence for China's participation in the new round of restructuring of international investment rules.