The Journal of

WORLD INVESTMENT & TRADE

ABSTRACTS

Bert Denolf: The Impact of Corruption on Foreign Direct Investment

Most recent development and economic theories argue that foreign direct investment (Fdi) is beneficial for economic growth and that corruption damages it. Yet, it is only recently that research started looking at the effects of corruption on Fdi. This article identifies the need to formulate a definition of corruption that encompasses all its forms as they appear in the context of Fdi. Earlier findings as well as the cirruption indices used in research serve as the backbone for this article’s findings. The article concludes that corruption has only a mild impact on the decision whether or not to participate in Fdi in a particular country.

Bert Denolf, LL.M. (Columbia), M. Gen’l. Mgmt. (Vlerick Leuven Gant Management School), and law degree (Ghent University), is an attorney at Clifford Chance, Brussels.

Zeng Huaqun: Unprecedented International Status: Theoretical and Practical Aspects of the Hksar’s External Autonomy

This article demonstrates three points: (1) that the Hksar’s external autonomy develops a new component of autonomy and thereby strengthens and enriches the content of the theory of autonomy; (2) that the successful practice of the Hksar’s external autonomy in such aspects as special positions in international organizations and conferences, autonomous treaty-making power, special arrangements for applying treaties and relations with other regions in China demonstrates convincingly that the Hksar enjoys and develops its unprecedented international status; and (3) that the characteristics of the Hksar’s external autonomy include authorization nature, double legal grounds and international guarantee.

Dr. Zheng Huaqun is a Law Professor and Director of the International Economic Law Institute of Xiamen University, China.

Adhemar G. Bahadian and Mauricio Carvalho Lyrio: Ftaa Trade Negotiations: A View of the Brazilian Co-Chairmanship

This article narrates the negotiating process of the Free Trade Area of the Americas from the point of view of the Brazilian Co-Chairmanship, between 2003 and 2005. It describes the fundamental imbalances that were involved in those negotiation which, in spite of the efforts by Mercosur to correct the negotiating path, inevitable led to what seems to be a permanent stalemate. It discusses future prospects for the negotiations and alerts to the risk of a new wave of protectionism.

Adhemar G. Bahadian is Brazilian Ambassador to Italy and former Brazilian Co-Chair of the Ftaa negotiations.

Mauricio Carvalho Lyrio is a Brazilian diplomat.

Matthew T. Simpson: Mitigating Volatility: Protecting Chinese Investment in Post-Conflict Regions

As China’s economy grows and government controls liberalize, Chinese investors are realizing the value and opportunities associated with investment in post-conflict regions. Given this trend, and the volatility associated with the political and economic environments in post-conflict regions, this article illustrates several mechanisms—bilateral investment treaties, domestic laws regulating foreign investment, tax treaties and tax incentive zones, and international investment organizations—Chinese investors may wish to employ when investing in post-conflict States. Such mechanisms serve to incentivize foreign direct investment by providing lower market entry and operating costs and protecting investment with transparent and robust controls. While none on their own guarantees protection, together they provide a substantial safety net should the investment environment deteriorate.

Matthew T. Simpson, JD (American University), is a Peace Fellow with the Public International Law & Policy Group (Pilpg) and will join Weil, Gotshal & Manges Llp in the Autumn of 2008.

Cai Congyan: Structure of Arbitrators and its Implications towards Icsid Mechanism: An Empirical Analysis

The dramatic increase of international investment disputes and special characteristics of international legal rules concerning investment make it arbitrators who play a very important but somewhat uncontrollable role in the settlement of investment disputes. In this article, the author first analyzes the special characteristics of Icsid mechanism and its arbitrators. The author then conducts an empirical study of the structure of Icsid arbitrators during the period 1996–2007 and finds that nationals from developing States poorly participated in the Icsid arbitration mechanism from the perspective of being constituents of arbitral tribunals. The author argues that the current situation of the constituency of Icsid arbitral tribunals will damage the legitimacy of Icsid mechanism. Based upon that, the author reviews some trends of Icsid mechanism and provides some suggestions to reform it.