Supervisors: Ingo Kleindienst & Yulia Muratova
Discussants: Sarah Bruhs Sørensen & Rahul Anand

Chengjiao will present her 3^rd paper.

Abstract
This study examines how Bilateral Investment Treaties (BITs) influence the location choices of multinational enterprises (MNEs) in cross-border mergers and acquisitions (CBMAs). Although BITs are widely recognized for mitigating institutional risks by offering legal protections, their effectiveness is not uniform. Using a comprehensive dataset of 1,107 CBMAs from China, Japan, and South Korea to 71 host countries between 2010 and 2019, we find that BITs increase the likelihood of MNEs selecting host countries with a BIT in place. However, this positive effect is moderated by geographic distance, as greater distance increases information asymmetry and associated enforcement costs, which in turn diminish the practical benefits of relying on BITs. We further show that BITs mitigate the adverse effects of institutional distance and small firm size on location choice, but these benefits are realized in geographically proximate contexts. Our findings contribute to the literature on CBMAs, revealing that the legal protections offered by BITs are not universally effective, but are constrained by geographic distance, institutional distance, and firm size.

Everyone is welcome!