Accounting for the Internal Dynamics of Bilateral Investment Treaties : Every Bit Counts

Bilateral Investment Treaties (BITs) are agreements between two states stipulating the terms and conditions by which investors from one state will be treated in the other. The vast proliferation of BITs in the last two decades has prompted scholars to study the effects BIT membership has on foreign direct investment flows to less developed countries. Unfortunately, the results of these studies have yielded ambiguous results. This analysis will improve upon previous studies by producing a scale which will allow the study to account for content variation in BITs in the empirical model employed