Do International Investment Agreements bite on Swedish outward FDI?

Abstract: This study aims to investigate whether International Investment Agreements have any effect on Swedish outward Foreign Direct Investments. The signing and ratification of treaties has continued in a steady pace but their efficiency has been questioned. The study is conducted using a panel dataset regressing Swedish outward FDI to 110 countries between 1998 and 2011. We find no statistically significant impact of ratified Bilateral Investment Treaties (BITs) on Swedish outward FDI indicating that Swedish treaties have failed to fulfill their purpose of fostering investments. The results also suggest that Double Taxation Treaties (DTTs) do not have an effect on FDI except for investments to developing and transition countries. Findings show no impact of the number of ratified BITs by a host country on Swedish outward FDI flows but a positive correlation between the number of ratified DTTs and FDI.