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International cooperation and conflicts on trade and foreign direct investment

Abstract : The economic analysis of international flows of goods and capital do not consider the international political system in which they take place. The lack of enforced justice at the international level however creates risks specific to exchanges between sovereign states. In the thesis, I argue that taking into account the specificities of the international system is necessary to understand why some countries choose to create some kinds of international economic agreements and their effectiveness. The first chapter shows that the differences in the form of regional trade agreements are not related to the level of trade integration. The second chapter then proposes an explanation for the choice of different strategies of regional integration. I develop a model of endogenous formation of regional trade agreements in an insecure world in which conflicts may spill over into war. This model show that country pairs undergoing more interstate disputes and naturally more open to trade are more likely to create deep regional trade agreements, while the opposite is true concerning shallow agreements. Chapter 2 also provides empirical evidence supporting these theoretical results. Finally, Chapter 3 investigates the effect of bilateral investment treaties on foreign direct investments. It shows that, when investing abroad, foreign investors face an expropriation risk related to the interstate political relations between their home and host counties. The empirical analysis of Chapter 3 shows that a bilateral investment treaty offset these risks and increase more foreign direct investments between countries undergoing diplomatic tensions
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Submitted on : Wednesday, February 25, 2009 - 11:39:39 AM
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Vincent Vicard. International cooperation and conflicts on trade and foreign direct investment. Economics and Finance. Université Panthéon-Sorbonne - Paris I, 2008. English. ⟨tel-00364095⟩

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