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ICEPP Working Papers

2013

Debt; debt guarantees; political risk; default risk; bilateral investment treaties

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Beyond Fdi: The Influence Of Bilateral Investment Treaties On Debt, Mina Wesseem Jan 2013

Beyond Fdi: The Influence Of Bilateral Investment Treaties On Debt, Mina Wesseem

ICEPP Working Papers

This paper examines theoretically and empirically the role of political risk guarantees, which bilateral investment treaties serve, in debt accumulation in low and middle income countries. The paper empirically finds that signed bilateral investment treaties with OECD countries have a positive influence on total and guaranteed debt accumulation, under system GMM and OLS estimation methodologies. Results suggest that the role of bilateral investment treaties extends beyond attracting FDI to international lending.

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