اثر تعدیل شدت قرارداد سرمایه گذاری دوجانبه بر رابطه بین بی ثباتی سیاسی و انتخاب مالکیت وابسته The moderating effect of bilateral investment treaty stringency on the relationship between political instability and subsidiary ownership choice

1. Introduction Developed industrialized countries can use bilateral investment treaties (BITs) to protect the rights of their companies as they invest in uncertain markets. Developing and emerging countries, on the other hand, sign BITs in order to attract inward foreign direct investment (FDI) (Neumayer & Spess, 2005) and compete for a share of the world’s FDI (Elkins, Guzman, & Simmons, 2006). Political uncertainty in host countries renders BITs useful as a source of information about the treatment of multinational enterprises (MNEs) and protection of their assets in such countries. Scholars have argued that BITs can mitigate political instability by offering credible and enforceable international legal protection of foreign investors’ rights (Raghavan, 1997; Rosendorff & Shin, 2015; Sornarajah, 2004; Wälde, 2005). There is a growing evidence that the presence of BITs encourages FDI and reduces the likelihood that host governments will engage in policies harmful to MNEs (e.g., Desbordes & Vicard, 2009; Elkins et al., 2006; Jandhyala and Weiner, 2014; Neumayer & Spess, 2005). However, research on this has yielded mixed and conflicting results (Kerner, 2009). Subsequently, scholars have begun to question how the content of BITs influences FDI across countries (Suarez Anzorena & Perry, 2010; Berger, Busse, Nunnenkamp & Roy, 2013). Unfortunately, answers to the question of how the design and content of BITs influence MNE strategy have not yet been provided by international business (IB) research. There is little empirical evidence on how BIT provisions may be associated with MNE market entry strategy. Research on the institutional determinants of MNE strategy in the field of IB has mainly focused on other country-level institutional conditions that influence MNE internationalization decisions. Examples of these include: legal restrictions on FDI in the host country that influence use of joint ventures (Brouthers, 2002), how institutional progress in transition economies is related to MNEs choosing full ownership modes (Meyer, 2001), and the impact of institutional distance between home and host country on joint venture formation (Gaur & Lu, 2007).