Research On The Impact Of The Quality Of BIT Clauses On The Binary Margin Of Overseas Direct Investment By Chinese Enterprises

Under the two-wheel drive of the "going out" strategy proposed by the Chinese government in 2000 and the "Belt and Road" initiative proposed in 2013,large and medium-sized state-owned enterprises and local backbone private enterprises have taken the lead,so that the overseas direct investment of Chinese enterprises has completed leapfrog development from scratch,from small to large,from bilateral to multilateral,from local to global.In 2015,for the first time,the outflow of China’s outbound investment exceeded the inflow of foreign investment,ranking second in the world,and successfully entered the ranks of the world’s foreign investment and cooperation powers,and the development of China’s outward direct investment has also ushered in a new era.The BIT investment treaty is a bilateral treaty jointly signed by the bilateral authorities of the capital-exporting country and the capital-importing country in the global market against the background of the lack of global capital circulation norms,which is specifically used to ensure the free flow of bilateral funds across borders.The BIT investment treaty provides a stable investment and financing environment for bilateral investors in the countries under which the contracts are signed,and is an important guarantee for China to implement the "going out to sea" strategy and the "Belt and Road" initiative.At present,we are in a new era of major changes that have not been seen in a hundred years.The sudden emergence of the new crown pneumonia epidemic sweeping the world,the country’s rising awareness of trade protectionism and anti-globalization,the increasingly intensified Sino-US economic and trade game,and the increasingly prominent geosecurity risk issues have seriously impacted the global economic system,making enterprises encounter greater and greater risks in overseas investment.In this context,there is also an increasing need to protect overseas investment firms through bilateral investment treaties(BIT)with host countries.Therefore,this article will examine the relationship between BIT and overseas direct investment by enterprises.On the basis of previous research,this paper will further study the heterogeneous impact of the structure and content of BIT on the scale and scope of enterprises’ overseas direct investment from three dimensions,such as breadth,depth and final degree of implementation,beyond the standard issue of whether BIT promote enterprises’ overseas direct investment.This paper also pays attention to the heterogeneity of the industry,breaks through the previous macro level of national data,and uses the tracking data of Chinese enterprises’ outward investment from 2005 to 2019 to examine in detail the effect of the quality of BIT clauses on investment in different industries.The results of the study show that: First,improving the breadth,depth and final implementation of the provisions of BIT has a significant role in promoting the marginal growth of outward FDI of Chinese enterprises,but only when the depth of the provisions is deepened will it have a more significant impact on the marginality of intensification,and the above conclusions are still valid after considering endogenous issues.Second,the impact of different types of BIT clauses on the binary margin of enterprises’ overseas investment is also different,of which the most significant impact on the marginal expansion of investment is the investment promotion clause,and the biggest role in promoting the marginal investment intensification is the dispute settlement clause.Third,after considering industry differences,it is found that the quality of the clause has a stronger effect on promoting the binary margin of overseas direct investment in industries with high sunk costs and high political sensitivity,such as public utilities,real estate and transportation,of which the expansion margin is significantly greater than the intensive margin.For resource-acquiring industries,such as the energy industry and the metals industry,the role of OFDI is less significant,and there is no significant promotion effect on the technology and financial industries with high non-transferable assets.Therefore,high-quality BIT clauses can indeed prompt Chinese enterprises to increase the scale and scope of overseas investment and protect the rights and interests of Chinese investors.However,at present,most of the existing bilateral investment treaties in China are too old to adapt to the current economic development trend.It is necessary for the Chinese government to update and improve the content of the provisions in light of the current international situation.The findings in this paper can better help agreement makers and negotiators assess the necessity and effectiveness of the provisions,help Chinese companies better go global,and seek closer bilateral relations with other countries.